RJFS Goes Wirehouse

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Farmboy's picture
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http://registeredrep.com/mag/finance_ducking_va_storm/
Forget the "customer first" talking point hyperbole, it's a proprietary VA model and take it or leave it for "independent" advisor's. Imagine leaving a wirehouse for this? RJ management knows best for customers? I have bridge to sell you! 
The further end of the prospectus system is at hand if this comes off. Small brokers are a thing of the past and the public access and hostility will only grow when that happens. Once firms compete on prospectus pricing the same vicious cycle that took over stock commissions and trading begins. This is worse, if anyone charges more on a buy and hold product they will be labeled "abusive" in the Spitzer/Boggle driven culture that runs through this whole blundering, hypocritical reaction of Averitt and company. RJF is making this throw "bone" effort due to the major regulatory hits such as the Herula case and various pricing disputes and settlements.
Really, really dumb management, betrayal of business plan for everyone sold on "independent" and reflective of how our business gets worse in response to the abuse of others. Someone does something wrong you accuse and collect off the more virtuous survivors and those who are still in the game. It's very cynical; they'll whine about losses on this move but once the proprietary machines roles on it will be raping and pillaging advisor's and customers in the name "the publics best interest". RJFS should now be considered a wirehouse and the best thing for independent advisors everywhere would be for a 1000 RJFS contractors to resign and this third string management to be wiped off the planet.
 
  
 

eddjones654's picture
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Farmboy,
Who clears for you?

Farmboy's picture
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eddjones654,
Who do you think? Do I sound happy and uninformed?
We have two brutal moves at the start of our fiscal year; the other involves the lame EIA power grab that I'll leave to others to explain in detail. In short RJF is eliminating a clear outside or private transaction so they can collect the tax and suck up some more to regulators about how tough they are on supervision. Again, Herula was criminal, RJF did a lousy job on the supervision of the event and everyone else must pay for somebody else's blunders and crimes. I love how this process works. You screw up then you tax others to clean the mess as you accuse them in the process. So let's invent a proprietary VA as the solution to "high" annuity costs?
Just remember this; if it gets produced and marketed you will be the dirty overpriced VA salesman according to RJF logic at the other firm. Think about where this is going and where this is taking the business.
Ask yourself this; "Did they ever include you for income on a trade  you were not part of?"
I'm sure I'll get the disloyal employee twaddle soon on this thread, guess what;
I'M NOT AN EMPLOYEE!!!!!
The VA move is in flux and I think far worse than banning outside EIA sales but both are horrible overbearing adviser abuses. I hope hundreds leave because that's the only thing that changes policy.
Don't join this firm until the management is replaced and the advertised business culture is restored. What is Tom James thinking about? Selling out is most likely. What a mess.
 
 
 
 

skeedaddy's picture
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Joined: 2005-06-16

What RJF is doing shouldn't come as a surprise. Its very typical. They spend
several years and several millions of dollars marketing a business model and
then when they have a considerable scale, they put the screws to everyone.

I think there's more to it than that. How else can you explain why a firm
would "voluntarily" reduce their income by almost 40% unless there's some
agency really threatening them.

Duke#1's picture
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Joined: 2004-12-06

Sure this is controversial.  But, all RJ's doing is making a valiant attempt to take the lead to change and simplify an over-priced industry.  Some of you will remember when MF commissions were 8 1/2% and before "May Day" when stock commissions were set instead of negotiated. 
VAs inevitably will face the same & RJ is taking steps to be ahead of the curve.  Just like they were ahead of the curve in enabling its reps to buy and get paid on VAs (and do 1035s) with an on-line order ticket instead of a check & app.  Just like they were ahead on getting annuity values on client statements.
Personally I don't have a problem with giving clients a more simplified and lower commission schedule for VAs.   5% upfront & a 50 bps trail is fair to me.  Also, I still will have the c-share pricing option without any change.  That's just the commission side.  What's missed in some of this is that RJ is also getting the carriers to reduce M&E; 100 bps maximum is what RJ is pushing for.  My clients will benefit and I'm still being fairly paid.
Assuming RJ is successful in getting carriers to abide by all this, until the rest of the industry follows suit (which sooner or later we'd all eventually be facing since the regulators are already pushing for such things) we'll have a competitive advantage for a while -- a lower cost product for clients than what others will be able to offer.
Yeah, some reps here are not happy with the change.  It's hard for a lot of people to face change.  But, the vast majority (including the highest VA sales ones) realize this will be slightly painful in the short run, but best for their clients in the long-run.  And, if anyone in this industry thinks the current VA commission gravy train will run forever, then they're either naive or smoking something great!

Cerberus's picture
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Joined: 2005-09-07

You're spot on Farmboy.  First the fund breakpoint fiasco, then
the eia handcuffs, then Herula and his wrath..whats next?? 
Hopefully Tom James will wake up and replace Averitt with Helck before
Dick destroys the firm.  I'm a 10+ year RJFS vet that is
regrettably planning on leaving in 2006. This was a great firm when
Tony Green ran the company. 

Duke#1..If Averitt really cared about reducing VA fees, why doesn't he
bring A share va's to the front stage?  RJFS has them and they
would lower the expenses of the va's to our clients.  But they're
never mentioned or marketed....most RJ fa's don't even know they can
sell them.

Farmboy, btw did you know Averitt is a Duke grad?    

Duke#1's picture
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Cerb, MF breakpoint "fiasco"?  This was not just an RJFS issue, this was an industry-wide issue (i.e., having to audit past trades and make clients whole for their eligible breakpoints) so I'm not clear on why you're anger is so focused on RJFS.  (nor why just on Averitt, as this was a total RJ matter, not just RJFS -- so you should be just as angry with TJ and Chet). No firm had the systems to catch this breach in its entirety because there was no way to always capture the data, in part because there was no automated way to know if a client had a MF position at another firm, etc. to catch eligibility for a breakpoint.  From your anger, I guess you got hit with a lot overcharges, and for that I'm sorry.  Fortunately, I didn't get hit very hard as I take a financial planning approach, and so in my data-gathering I had a pretty good understanding of my clients' outside positions.  I'm sorry you didn't.
EIA "handcuffs"?  If you're concerned about no longer being able to freely sell EIAs as an outside business activity like we can sell "fixed" products, then you can call that handcuffs if you want.  But, all RJFS is doing is getting in alignment with the regulators.  As its been made clear to all of us, the NASD is now mandating that because EIAs are regularly being improperly sold they are placing higher supervisory standards on b/ds, including providing training for reps.  The SEC is also looking into this issue. All RJFS is doing is taking the necessary steps to abide by its regulatory responsibilities to protect you and the firm.  That's what I look for in my b/d to do.  It's certainly your perogative not to share that.  But, sooner or later all b/ds will join RJFS & the other firms that are taking these steps now.  So, leaving RJ won't solve that issue for you.  And, if continuing compliance restrictions are an issue for you, then you might as well leave the industry, not just RJFS, because the regulators are going to continue to make it more restrictive for all of us.
Herula "wrath"?  Herula was a rogue & yes RJFS was at fault for not catching him.  No firm's supervision is perfect and every firm has experienced such issues.  The good news is that RJFS didn't knuckle under to the SEC; they aggressively fought them and in great measure I believe that's why the SEC escaled things to take the unique step of bringing fraud charges.  But, as you know, in the end all RJFS got hit with was fines relating to the number of letters that Herula sent out on RJ stationary, and the judge's opinion was actually very complimentary about RJFS as a whole.
Also, re the VA changes -- that's also not just an Averitt issue.  That applies to all of RJ.  So, getting rid of Averitt shouldn't sooth you; he's third down the list of the management chain.  If you're looking for someone to "blame", then TJ and Chet should be at the top of your list.  And, as far as Averitt bringing A shares front & center to you, I've never seen hiim try to push anything on me to sell.  In fact, if Averitt had come out with a policy telling you you could only sell A shares you'd be posting here just as angry for that.  Also, A shares are a part of the whole VA pricing issue -- their M&E will have to drop to no more than 100 bps as well.  As far as A shares not being "mentioned or marketed" -- you're obviously not aware of our product availability; there's more A share products here than anyone could possible use.
And, yes, Averitt went to Duke.  So did Kent Christian.
PS: Please don't wait until 2006 to leave RJ.  And take Farmboy with you.  I can understand your frustrations with change, but I don't care to be associated with reps who aren't foresighted enough to know that change is necessary in our industry & in our practices.  I admire Tony Greene too, Cerb, and you'll remember he always said RJ and its reps should always be moving ahead to "change before you're forced to change". 

Farmboy's picture
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Duke#1 writes;
But, all RJ's doing is making a valiant attempt to take the lead to change and simplify an over-priced industry. 
You seem to miss the obvious Duke#1. RJ is dealer not a regulator. Bad enough the level of regulations and collusion between the dealers/regulators to enrich and justify themselves at advisor's expense with acts such as this. Now it becomes "valiant" for one alleged "Independent" dealer to reprice street items under the proposed innocent goal of "lower prices to consumers". If we go back to the consumer model of dealer dominated proprietary products it will make dealers that much fatter and consumers that much poorer. Advisor's will do worse as well. So it isn't dealers and regulators looking out for consumers but building a device to control advisor's and further commodidize which will certainly be worse for consumers in the end. Mandated lower prices are price controls Duke#1, you're coming out in support of it in your own industry, what next? How about Gas, Heating Oil or perhaps car prices? If you think you know the right price for an annuity why stop there?
The RJFS contractor system was built on just the opposite concept. Yes, they have a regulatory function but advisor's make the decisions about how they run the business. If the NASD wants uniform changes and price controls they don't need RJ to suck up and volunteer.
For an industry that supposedly promotes free markets it has has far too many people so willing to blindly accept the many socialist tendencies of the New Deal regulatory structure that still survives. You refer to "May Day" but who decided if prices rise or fall?? Somehow I think it's markets themselves that get to choose that not half-baked management decrees and regulators who want a photo op with "Suze" or John Boggle. The "May Day" point is especially poor since that really was a regulatory change that impacted everyone. This (the VA repricing) is just a bad management decision by RJ for I imagine complex and mostly far less than public interest reasons as is being touted by yourself (Steering advisor's into better margin items for RJ dealer vs. advisor interests being an obvious example). You're always careful to avoid these points Duke#1 which only validates them more. Think about how undermining this trend would be if consumers had nowhere to go to avoid proprietary pricing and schemes of individual dealers? Why don't you address the point Duke#1????
The VA proprietary price fixing at RJ is boldly hypocritical and I think we both know this Duke#1. In age of massive over-regulation we don't need appeasers or apologists gaming prices that are advisors and customers decisions to make. If you think the VA choices I might make are "over-priced" you can certainly shop for lower costs VA items that markets not regulators are bringing to the market.
RJ had diminished itself and it's brand as an "independent" dealer and these are the point you should focus on. Instead you bury your head on the specific rationalizations as to why the RJFS is contradicting it's own recruiting statements. Too bad recruiting promises from dealers aren't treated by attorney generals, NASD and the SEC the way any other abusive distortion for profits that are issued to the public from our industry wouldn't you say Duke#1?? Maybe we need a regulator to define what "independent" really means and ban any firm that doesn't meet that standard from using the term. It's false advertising too for RJ to keep touting independence when it's busy designing restricting VA products (the hair splitting on "proprietary" also weakens your argument, if it doesn't transfer and eliminates the independent product Duke#1 that's enough for most advisors). It's kind of amazing this area hasn't been regulated given the excess and hyperbole spewed from these "consumer friend" dealers. Of course, I would be against such regulation but I use the device to expose your own duplicity on the subject.
 
 
 
 
 

csmelnix's picture
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Farmboy,
Nicely put, I am finding your comments of great interests.  I have heard a few things that have surprised me of late about RJFS' direction.  The VA commission cap, the E&O policy requiring OBAs to come in house or you have to find your own E&O coverage for it, production requirements, and a new one I just heard from a friend of mine there that said all OBAs have to be reviewed individually for approval - as he explained; if he wants to sell fixed products away each specific product needs it's own approval.  I was shocked, as he later stated, he was waiting for the meeting to break up in Tampa so he would know when to hang up his new Merrill Lynch sign.
What are you looking at for your options? 

Duke#1's picture
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Farmboy, you keep referencing RJ's motivation for new VA pricing as being one to .."Steering advisor's (sic) into better margin items for RJ dealer vs. advisor interests...".  I can't respond to that allegation because I don't know what you're talking about.  I guess you're privvy to RJ's margins on various products, but I'm not.  So, please share the specifics. I'd love to learn it.  If you're going to allege something about margins, then please provide proof.
Nevertheless, even if you're correct that VAs are a low margin and undesirable product for RJ, then I guess the obvious question is why would they be further lowering these already low margins by their new pricing proposals?  Similarly, why aren't they touching commissions on the c-share VA products?  Also, if RJ isn't pleased with the margins on VAs, why are they going to all the trouble to attempt to get insurance companies to restructure the products to address this?  Why not just take a haircut on the commission gross like so many other firms do, or lower payouts?  Wouldn't that accomplish the same thing if improving margins is RJ's motivation?  Also, why did RJ spend so much money a few years back to develop the technology to enable us to write annuity tickets on-line instead of the "check & app" system used by most firms?  Why invest to make it easier to write business in a product that isn't desirable to RJ as you allege?  As you can see, I just can't follow the logic of your allegations because there are just too many contradictory factors.
You take the position that b/ds have no business in contolling the pricing of products, and that RJ is hypocritical by doing so.  If that's the case, then you have bigger issues with RJ than just VA pricing.  RJ (like all b/ds that I'm familiar with) control prices at many levels.   For example, RJ sets maximum commissions on stocks, bonds, etc.  They set maximum allowable fees on their fee-based programs.  They won't approve certain other products (like in the LP category) that are too rich in fees.  So, attempting to change cost structures in VAs is not hypocritical; it very much falls in line with RJ's long history & the common practices of our industry.  My obvious point is that if you're looking for a b/d that doesn't consider pricing as a factor in products then you'll have to look long & hard to find one, if you even can.  Controlling of prices by b/ds in not unique to RJ; it is the reality of our industry. 
So, Farmboy, you can rank & rave about the state of our industry and RJ all you want, but it is what it is.  If you don't think b/ds should get into pricing issues, then you need to start changing the industry.  In the meantime, you'll just have to learn to take the good with the bad. If the way RJFS conducts business isn't "independent" enough for you because they may control prices in products, then there's plenty of choices for you.  If you can find a reputable b/d that gives you total autonomy in pricing, product selection, etc. then good for you, and best of luck in your new firm!

Farmboy's picture
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csmelnix,
I've seen bad stuff before and then people come to their senses. The firm has good qualities too but when you get the "less is more" rationalizations of facts it only makes it sound worse as you have to s-p-e-l-l-i-t-o-u-t for who knows what reason.
This is very dressed up pig, clinging to NASD guidelines to go through the list of "changes" that all have other self-serving motives in dealer and advisor turf issues. One more analogy that I haven't shot down yet is the comparison to the "b-share" caps which I'll do here;
Duke#1 argues that RJ was way "ahead" on b-share caps. I would argue that this is exactly the sort of back-door pandering to obtuse regulations that we don't need and have only created new liability standards. If a product is deemed "unsuitable" on pricing guidelines then it's up to regulators to define the prices they wish to say are acceptable, since that smacks of regulated prices they convolute circumstances to advance that agenda. In short, it's dishonest regulations and often with winners and losers that have little to do with the publics interest at heart. You might argue that dealers can't control this but that is naive. Imagine GM warning sales people and local dealers about a product flaw in one of their cars and how they might be accountable if they sold the flawed item to the "wrong" consumer. The sales person not GM would be held accountable? Think about that logic. Who approved "b" shares in the Blue-Sky process in the first place? How did this become the lowly dealers job to see that it was correctly priced? And where are those NASD price caps for everyone when you need them as you were approving products to market? So the complaints are abstract and inconsistent on the face of it.  
This is exactly the road we find ourselves on with many of the RJ and dealer regulatory rationalizations. Products that aren't banned or out of the NASD reach to price become subject to "suitability" and "supervision" concerns. It's advisor abusive by definition. Those words weren't invented as price controls in themselves unless they were hidden in say a bond spread. From that humble beginning we are here today (a bond spread you might note isn't fully disclosed to this day by a dealer as a normal operating procedure). If you are for regulated prices on financial products you should be honest and admit it instead of the phony "I'm concerned for the public more than you are" twaddle that has been served here. 
There was an amazingly poor defense put up on alternative pricing of share class mutual funds (b-shares for example). Both from dealers who mediate the commissions and the fund companies themselves. Again, this probably had to do with the ever growing mantra of "fee platform good, commissions bad" culture that is now mainstream industry culture. So RJ didn't "lead" in a good way on b-share caps but took on the liability they clearly should and could have punted on. It really wasn't a dealer liability until they laid down and set the new scapegoat precedent. This should have been as with the current VA discussion a regulator vs. product manufacturer discussion if the only concern is gross pricing.
You really have to think about the underlying manipulations of these moves. Since technology lowered dealers real operational value the only agenda to enhance is that of micromanagement of "compliance" nuances. This is the real reason your ticket charges remain stuck in the 1980's. Worse than that of course is the process of pushing every systematic industry flaw down to the broadest level possible to collect fines. The "A" share breakpoint settlement was another perfect example. The dealer can screw-up in an unlimited fashion as long as the "industry" as a whole can collect the various taxes to be paid on retroactive compliance "changes". Now these same people want proprietary price caps.
Dealers have to measure many interests including the producers who generate the income for the firms. Sure the NASD is made of every type of firm, at time RJ is the target of those who they recruit from. Clearly, wirehouse firms are eating this up both to retain and shoot down the concept of "independent" advisors. It seems to me that many channels from "fee only", traditionalists, insurance advisors can't work together due to competitive zeal. All their futures are in decline as one-size-fits-all takes over regulations. I would be very alarmed by the Duke#1 version of "simplified" pricing. Just go to your local Wal-Mart and see how you might fit in there.
 
 
 
 
 
 
  
 
 
 
 

Duke#1's picture
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csmelnix wrote:
Farmboy,
Nicely put, I am finding your comments of great interests.  I have heard a few things that have surprised me of late about RJFS' direction.  The VA commission cap, the E&O policy requiring OBAs to come in house or you have to find your own E&O coverage for it, production requirements, and a new one I just heard from a friend of mine there that said all OBAs have to be reviewed individually for approval - as he explained; if he wants to sell fixed products away each specific product needs it's own approval.  I was shocked, as he later stated, he was waiting for the meeting to break up in Tampa so he would know when to hang up his new Merrill Lynch sign.
What are you looking at for your options? 

Cs, it sounds like what you've heard about RJFS is either not news or may not have been fully explained to you. 
Did you learn why RJ's E&O coverage no longer covers OBAs?  Are you aware of the insurance industry change w/ E&O due to changes imposed by state insurance carriers this year?  Do you know what other independent b/ds are doing to address the industry changes with E&O coverage?  Do you know how RJ has arranged with other outside sources for those reps needing OBA coverage?
What is the problem with minimum production requirements at RJFS?  It is a problem for a low producer (under $60k/yr), because he either has to pay something additional to help offset the cost of supporting him until he becomes more successful, or leave for a b/d that doesn't care if it has low producers.  If he's not a low producer would he rather RJFS stop having minimums so that the successful producers  subsidize the cost of carrying low producers?  Did you know RJFS has had production requirements for many years and this is nothing new?
RE OBA approvals, did your friend tell you that RJFS has always required disclosure & approval of OBAs?
While I currently have no reason to leave RJFS, I'd also like to hear from Farmboy about other indy b/ds and how they're different on these issues you raised.  It's always good to know if the grass is really greener!

Farmboy's picture
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I'll get to the bulk of your reply later but on this;
I can't respond to that allegation because I don't know what you're talking about.  I guess you're privvy to RJ's margins on various products, but I'm not.  So, please share the specifics. I'd love to learn it.  If you're going to allege something about margins, then please provide proof.
What do you think happens to securities held in street name Duke#1 as opposed to being held at an insurance company in a Shadow balance on an RJ statement?
What are the "admin" fees in the advisory divisions on top of what haircut on the work?
Remember, it isn't just money but control too. RJ does get private income on top of advisor charges from insurance companies but why play dumb Duke#1? I wouldn't ask a question I didn't know the reply to with you. At least concede the math which is obvious. You can say this isn't the motive because that is all speculation but it makes far more sense in the equation then those mean nasty "regulators" who seem to prompt every dealer benefit over advisor battle you are shilling for as in this case. I'm sure the "why" of this is far more complex then "leading the industry in simplifying prices" for the public good. You sound like the guy who wrote the memo.
It was a blundering, selfish, overreaching, contradictory act Duke#1 on the part of the firm. It should be reversed and the culprits purged.
I'll get to the other Red Herrings in your post later, I have pay for some salaried workers this afternoon.
 
 
 
 

csmelnix's picture
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Duke you are way too defensive, I'm not slamming RJFS I am just surprised they are taking it to such a level.  I can tell you in terms of E&O what RJ is doing is NOT shared across the indy channel!  I don't care what the state changes are, simply what RJ did here was turn it's back on it's advisors and told them to fend for themselves and by the way add significant costs to run their business.  RE OBAs I can tell you that it's not a matter of disclosure and approval that's a no Duh! but what was explained and again, I understand this to be 3rd party so I am not attempting to do this by way of accusing the firm of anything, but as it was explained, the advisor I know there mentioned that if he wanted to sell a 5 yr fixed and a 7 yr fixed product, each would require it's own approval prior to being sold (I don't mean each time). 
Minimum production issues - not sure if I personally have an issue with that other than it would be nice to allow the decisions to hire certain reps or business partners without the worry.  That's in my mind atleast the whole point of independence. 
Frankly, I doubt you would ever consider looking at some one else's grass.  I believe what Farmboy is stating here is simply that these changes sound more and more like one's coming from a wirehouse not an independent shop.  If you will look objectively at others on that side, I think you would see there are some who really view their advisors as a strategic alley v only a revenue source; just like wirehouses.  It sounds like these decisions are certainly coming from the view point v one of supporting the independent business owner - this is an argument you and I had a few months back as Indyone was doing his due diligence.  Funny how my comments then are proving my point now.

Farmboy's picture
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Duke#1 Writes;
For example, RJ sets maximum commissions on stocks, bonds, etc.  They set maximum allowable fees on their fee-based programs.  They won't approve certain other products (like in the LP category) that are too rich in fees.  So, attempting to change cost structures in VAs is not hypocritical; it very much falls in line with RJ's long history & the common practices of our industry.  My obvious point is that if you're looking for a b/d that doesn't consider pricing as a factor in products then you'll have to look long & hard to find one, if you even can.  Controlling of prices by b/ds in not unique to RJ; it is the reality of our industry. 
You'll notice that I address your points directly while you evade the simple point that has been made. Tell me when RJ has mandated it's own pricing design on a packaged prospectus street product? Now you're listing many other declines and other regulatory excess in tighter bond spread etc. as the rationalization and justification. It's a digression since you can't seem to concede the obvious. I and many understand what my underlined questions means and represents. It's why we joined RJFS and now it's gone. There are little wirehouse things that creep in Duke#1 but this isn't "little". It's huge.
This is very different duke#1. The fact is that many of the caps for example in the fee sector aren't even competitive to the real street price so they get discounted in practice. That's how markets can work. This is made up problem that there is price excess in the VA area and the solution represents a betrayal of the RJFS business plan and recruiting system. Here "regulator" excuses are forcing a price down for who knows what reason but it goes way beyond the pandering you've presented.
Speaking of ranting duke#1 I'm not guy defending the irrational and fanatical position that I know what the right price for an entire industry and that all dealers in collusion should follow this pathetic attempt to ruin another profit center in our business. Part of the reason for so many abuses that may exist are in part due the faulty logic of killing margins in other trades such as bonds, cd's, "b-shares" even at small limits and in part made annuities more attractive. This isn't a singular reason for VA growth as there are complicated market and consumer forces that helped VA sales as well but clearly advisors were attracted to the complications of the VA because it was in part away from NASD fund share class hokum that you're using to help rationalize for new RJ proprietary inventions of VA pricing on this thread.
We could digress further but it's all off topic because you've lost the debate duke#1. More regulation and micro price management and creating captive products and advisors isn't going to help consumers and the flavor of the day excuse of "lower costs to consumers" is very hypocritical point for a luxury dealer that made it's fortune on expensive services largely sold by independent business people for this canard to be invoked so selectively in the VA area. Neophyte consumer advocates and regulators could make the same point about everything down to the postage charge and with this type of pandering to price controls you will have no one left to blame when the trend continues. Most everything you sighted in earlier price controls had certain security precedents. Much of it was influenced by market realities and dealt in the world of undisclosed markups. This is very different since the price is disclosed in a prospectus and the independent street prospectus is a central theme in the RJFS success story. The end of that model because your argument could be applied to anything and RJFS isn't an independent dealer anymore. 
Look, RJ owns a wirehouse too. Maybe you would be happy there but I think you're very much in the minority on this on the independent side. You're argument is especially weak as you compare VA expenses that were in decline due to free markets not regulators and you're willing to kiss the RJFS business plan good-bye on a silly and/or corrupt management whim. I can't believe you're in production at all. So when you talk about the common practice in our industry are acknowledging the existence of independent brokers or is all just one big happy one-size-fits all system you are defending?
The prices are better left to the people who make products not dealers. RJ can approve or disapprove but when they manufacture it changes everything, even by third party specification mandates. It doesn't matter that it's a contract job in a brown paper wrapper with no name on it. The deed is being done and it's wrong. Since it's in part venting duke#1 I've engaged your side points but I'll ask you to reply directly to my underlined question at the start. Even if you are selling the management line exclusively you might consider that competitive pricing on prospectus items is doom for RJ. Time to sell a couple of those building in St. Pete and get rid all the people in them because this is death march business plan. There will always be someone larger who can sell for less with the very pathetic rationalization "lower cost are good, higher costs are wrong" that has been wrapped around this move. No doubt in my mind you can force out 50% or more advisors on this plan and more importantly eliminate personal advice for millions of consumers who will be left with "Suze" at 3 AM. As I said before why stop at VAs? Let's cut those managed advisor fees in half, take 30% off fund fees, every account should have 50% ETFs. Someone always knows best on price (in fact everything, notice the subject relationship) in Cuba duke#1.
The independent prospectus is a pretty sacred cow duke#1. I'm sure the fee religion played a big part in this rationalization both from the firm side and I'm sure from that moronic regulatory "consensus building" that gets going while Refco goes bust with 500 million missing and the market cap is obliterated to zero in a few days. It's all about lame priorities duke#1.  Who knows duke#1, maybe this all part of regulatory syndrome that might improve but RJ should backoff this move.
 
 
  
 
 
 
 
 
 
 
 
 

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csmelnix
Thanks for adding some balance and reason to the thread. I somehow think from the writing style, obfuscations and themes that duke#1 is in management or a wirehouse driven area at RJ.
The point is clear for all who still need prospectus income that this is a very shocking and bad event at RJFS. It may not seem lethal and sadly many can't see the threat that dealer inside price mandates on prospectus items will mean to "independent advisors". It isn't good for fees either as it's a case of the last man standing when you get to regulated prices in the "Spitzer think" culture. This isn't your grandfathers price controls or pre "May Day", prices only can go down when you listen to this rhetoric and you can bet the innovations that helped trigger the VA boom such as living benefits and other features going to die faster than you can spell "downsize". I was suddenly thinking of Delta Airlines today and that business. This is the road to airline results and bank commodization that will wipe out thousands of advisors and lose further share to direct merchants, TV pundits and the new emerging "compliance wonk" sales culture where you have to prove your virtue through the lowest bid at all times. If your competition vacillates on this theme you label them "abusive". You see more and more of this culture and I'm sorry to say it grows out of the sinking rat syndrome for short-term advisors and segments. Consider the Schwab commercial where the customer ponders whose "children's future" his former broker was thinking about as considers his past commissions paid. Just vicious. Now in a way RJ is caving on this theme instead of standing up for the fees collected. Maybe the recent blows have mandated this attempt but it remains deeply flawed. You can also bet most of the people who bought into this and are selling it can walk away from this business tomorrow as they help kill it with this logic. I always find such trends ironic.
Perhaps they have concluded this price control road can't a avoided and looking at a list of moves this one had the best peripheral results such as triggering more fee transitions while still giving the regulators duke#1 seems convinced are behind the drive the "bone" of VA price caps. Still, it's a proprietary model in almost every-way in substance. That much seems undeniable yet duke#1 can't conceded the point perhaps you can second the observation and at least get that much out of him.  What duke#1 probably can't understand is that flaws and all I've enjoyed many things about RJ and I'm sorry to see it go down this path. There has been regulatory abuse on the firm and I think to a degree due to its size a likely target. This doesn't excuse some obvious issues such as the herula case but there are bad people at all firms and in all businesses.
Did you ever notice when when you spell check "wirehouse" "whorehouse" come up as a choice?
 
 

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Farmboy wrote (w/ responses in blue):
I can't respond to that allegation because I don't know what you're talking about.  I guess you're privvy to RJ's margins on various products, but I'm not.  So, please share the specifics. I'd love to learn it.  If you're going to allege something about margins, then please provide proof.
What do you think happens to securities held in street name Duke#1 as opposed to being held at an insurance company in a Shadow balance on an RJ statement? 
So, you're talking about securities available for lending purposes, I assume?  To me that's a stretch, particularly since it conflicts with RJ  doing so much to give greater focus on insurance product sales support & more product & resources in alternative investments.  But, if you want to believe that RJ VA restructuring is a way to push more investments to street name investments, so be it.
What are the "admin" fees in the advisory divisions on top of what haircut on the work?  If I understand you correctly, you're saying that RJFS has a profit margin motive to push toward fee-based because of what it earns on admin fees??  Admin fees don't go to RJFS. They're what pays the asset management area to run the fee programs.
Remember, it isn't just money but control too. RJ does get private income on top of advisor charges from insurance companies but why play dumb Duke#1? I wouldn't ask a question I didn't know the reply to with you.  I'm confused by the logic here.   If they get a profit advantage from something you call "private income" from insurance companies, doesn't this conflict with your premise that the VA restructuring is a move to push sales away from VAs??   Wouldn't they want to increase this "private income" by doing more VA business??  Also, if I were an insurance carrier that would see my margins reduced because of lower M&E charges necessary to do business w/ RJ, wouldn't I try to offset that by reducing whatever this "private income" is??
You'll notice that I address your points directly while you evade the simple point that has been made. Tell me when RJ has mandated it's own pricing design on a packaged prospectus street product?
RJ has done this with LP vendors that have tried to get us to sell their products.  When a product was too pricy in its structure that's been reason enough to decline to participate unless the vendor came back with a lower cost structure.  I had an LPL rep who was interested in joining my office & he sold a lot of a particular private REIT.  RJ's alternative investment guys liked the company but not the cost structure to the client.  They may at some time do business w/ them, but only if they do something to the structure.
Farmboy, I know this is all wasted effort on my part.   Everytime you bring up a point, I try to reply with specifics, but then you say something like "yeah, but...".  Look, I'm not defending the industry's regulatory environment; I'm just as mad about it as you.  The big difference I think is that you see RJ's actions as pandering to regulators and having some self-serving motivation.  As I said before, the VA restructuring is not really an issue for me; I use primarily c-share products.  But, I have greater faith in RJ than you do in terms of its decisions as it relates to compliance direction.  I want a b/d that'll take the steps to protect me & them.  I may not agree with every detail of what they do, but I have great comfort that the motivation is a pure one.  I didn't like the imposition of the b-share policy, but I trusted them enough to know that they had a compliance rationale.  And, they were right (Smith Barney & American Express got hit earlier this year w/ big fines because of b-share issues).  Whether it was Tony, or Dick, or Chet, I always got a straight answer for their rationale for various policy changes.  I may not have always liked the answer at the time, but in my judgement, history has proven them to be right.  So, I just don't have the paranoidal (sp?) feelings that you do re this VA issue that there's got to be some "control" & profit rationale for the decision.

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csmelnix wrote:
Duke you are way too defensive, I'm not slamming RJFS I am just surprised they are taking it to such a level.  I can tell you in terms of E&O what RJ is doing is NOT shared across the indy channel!  I don't care what the state changes are, simply what RJ did here was turn it's back on it's advisors and told them to fend for themselves and by the way add significant costs to run their business.  RE OBAs I can tell you that it's not a matter of disclosure and approval that's a no Duh! but what was explained and again, I understand this to be 3rd party so I am not attempting to do this by way of accusing the firm of anything, but as it was explained, the advisor I know there mentioned that if he wanted to sell a 5 yr fixed and a 7 yr fixed product, each would require it's own approval prior to being sold (I don't mean each time). 
Minimum production issues - not sure if I personally have an issue with that other than it would be nice to allow the decisions to hire certain reps or business partners without the worry.  That's in my mind atleast the whole point of independence. 
Frankly, I doubt you would ever consider looking at some one else's grass.  I believe what Farmboy is stating here is simply that these changes sound more and more like one's coming from a wirehouse not an independent shop.  If you will look objectively at others on that side, I think you would see there are some who really view their advisors as a strategic alley v only a revenue source; just like wirehouses.  It sounds like these decisions are certainly coming from the view point v one of supporting the independent business owner - this is an argument you and I had a few months back as Indyone was doing his due diligence.  Funny how my comments then are proving my point now.

Defensive?  Probably guilty as charged.   Important things in life often need to be defended.  Particularly when statements are sometimes made that aren't necessarily true.
Re E&O.  I don't think of this as turning its back on advisors, but you're free to make that judgment even though you admittedly don't know the reasons for the change.  As I recall you're with LPL.  Perhaps LPL has not yet made any changes to their E&O coverage, but assuming they're not fully self-insured they may well have to make changes next year (our E&O renewed this month so changes were necessary).  As it's been explained to us, many state insurance commissioners made changes earlier this year re how insurance carriers must structure their group E&O & the result would be that because the changes will place greater liability exposure on the carriers they (at least those that will still write E&O for b/ds) will reduce the coverage available to reps beginning next year.  RJ wanted to come up with a cost effective solution that would maintain the high limits we enjoy ($1mm/claim; $10mm aggregate), so they went to a corporate E&O policy instead of one that wrote as a group.  (We're still self-funded at certain underlying levels.) The result was that reps keep the same coverage and have a reduced co-pay/deductible than under the prior coverage.  The negative was that those that paid optional extra premiums to cover their OBAs under the old coverage couldn't be covered under the new coverage.  So, they will have to get their own coverage for their OBA activities, and that probably will cost more than what they previously paid through RJFS's coverage.  Since the much greater potential liability for reps lies with their securities activities and the majority of reps don't have an OBA requiring coverage, it seems to me to make sense to protect those limits.  I've got an OBA but it's just for my company structure, so I've never needed the coverage.  I'm sure if I needed the coverage my initial gut reaction wouldn't be good as no one likes to pay more.  But, I'd hope I'd be reasonable enough to look at the "greater good" benefits of the positive changes in my regular E&O coverage.
You might check w/ whoever handles LPL's E&O to see if they're aware of what I'm talking about and what their plans are.  If they don't, your friend at RJFS can give you a copy of the memo that outlines the issue better than I did here.
Re approval of fixed products, I'm not aware of any need to get approval on fixed products done through an OBA as your friend says.  The only change I'm aware of was that EIA's now need to be placed through us for all the reasons stated on so many other forum threads here and elsewhere. 
You and Farmboy can try to paint the wirehouse mantel on RJFS all you want.  But, for what it's worth, RJ is clearly advisor-centered in my judgment and experience here.  For example, would a firm that wants more control for its selfish corporate reasons give its traditional employed reps ownership of their book like RJ&A (the traditional NYSE entity) did about 3 years ago?  That's the antithesis of a wirehouse type firm! 
Yep, policies, procedures and changes to them here are always open to criticism, just as they are at other firms.  There's not a rep on these forums, regardless of firm, who doesn't find some fault with where they are.  I know of LPL reps who don't like the fact that you can't discount stock commissions more than 50%, when RJFS allows discounts essentially down to the ticket charge.  Which is more of an independent minded b/d, one that restricts a rep's ability to discount or one that doesn't?  That's a rhetorical question, not to start an argument, but I hope you get my point that darts can be thrown everywhere regardless of the firm.
We Indy reps are very entrepreneurial and we never like anything that we view as possibly getting in the way of our independence.  Maybe I've been in this business too long and have mellowed, but I know enough to know that responsible b/ds need to make changes and I can roll with the punches as long as I can understand the rationale for change, even though in the short term I may not necessarily always agree. 
Did RJ need to go out on a limb to try to get major structural changes in the costs of VAs?  Probably not, or at least not now.  But, I really trust these guys and up to this point they've not done anything to breach that trust.  Farmboy clearly doesn't seem to share that trust, as he seems to see a selfish RJ motive under every bump in the road that affects him.  That's the biggest reason why he needs to look elsewhere.  If you can't trust your b/d's management you have no reason to be there.  Ironically, that's one reason I struck LPL off my list when I went indy.  The LPL recruiter said some things about RJFS (then IM&R) that I found out were flat out lies.  Even though it was just a recruiter telling me lies, he was LPL's management representative and I knew that wasn't the firm for me. 

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Duke#1 writes;
RJ has done this with LP vendors that have tried to get us to sell their products.
Red herring anyone?! Talk about a rhetorical stretch! Aside from the b-share canard we have this. Comparing LP's to VA street items?
You ducked the observation again!;
Tell me when RJ has mandated it's own pricing design on a packaged prospectus street product?
Of course I'm talking the big stuff Duke#1, mutual funds, va, vul insurance. Who comes to RJFS because RJ creates and mandates the proprietary product design?
You're dog won't hunt Duke#1.
You're best bet is to start blaming the big firms at the NASD for shoving this down the smaller firms throat. There might be some truth there. You bet ML and SB are eating this up. Smaller firms will get crushed under these standards if they keep expanding.
Enough with the Caesar's wife routine and consider the power that is being exercised against advisors and where this leads. Every dealer setting it's own approved price on the package? Non-transferability of these custom designs? Marketing on price? Price controls Duke#1???
Important things in life often need to be defended. 
It's just that you don't seem to know what's important duke#1. I would have respected the firm more if it fought logical fights and took the fines. The b-share fiasco as with the a-share fiasco were poorly fought. Not just by rj but from the entire street as well as fund complexes. Our industry should take an example from the recent hearings of the oil titans in congress. They might lose but they explained market reality and defended their interests. Now we have a new breed of whiners from within sounding like they should put their resumes in at Consumer Reports making all sorts of groveling apologies when not spitting venom at each other. The idea that dealers end up on the hook for merely selling regulated and approved items without individual scrutiny of the transaction and now we are endlessly guided by generic opinions about "obsolete" and "correct pricing" of products that the market has clearly rationalized is fantastic decline for both consumers and advisor's.  Where is our market segment attacking discounters who heard clients like cattle? Permit all variations of "unsuitable" trade to go "unsupervised" without knowing their customers?
Free markets are worth fighting for duke#1. Trust me when I say there is always guy with calculator working how much money should really be on your tax-return that is "fair" both in the big buildings and at the NASD. They are in fact the same people with touch of madness all their own in each case. 
There are many agenda's here duke#1. Is there something Machiavellian about RJ decisions here? They seem to be becoming leaders in "caution" which usually comes down to laying down on the side of "preventing" anything but the core focus of the moment might be. Of course it's wirehouse like.
The total cash flow is most certainly greater in advisor channels than VA. I'm sure the pressure was huge to purge the revenue sharing or face some ugly dispute and maybe that was part of the deal. I'm sure there are many moving parts. It just amazes to me you would lay down on something as central as having a reasonable access to street items without a dealer manufacturing as an agenda at the same time.
I'm confused by the logic here.   If they get a profit advantage from something you call "private income" from insurance companies, doesn't this conflict with your premise that the VA restructuring is a move to push sales away from VAs??   Wouldn't they want to increase this "private income" by doing more VA business??  Also, if I were an insurance carrier that would see my margins reduced because of lower M&E charges necessary to do business w/ RJ, wouldn't I try to offset that by reducing whatever this "private income" is??
This isn't that hard. The revenue sharing is going out the window or a major disclosure process needs to be added. Both forces are trading off here, I expect the revenue sharing will end as announced in the memo. Therefore VA are less attractive. If you equalize rewards with other products, more simple products, VA sales will decline. The bump for the dealer will come from street names perks and other aspects. It's how this trend impacts recruitments, images about independence, growth of advisor fee incomes to offset the VA decline that will decide the success or failure from the firms view. There is also that NASD conformity issue to consider. If a dealer down on the list can take a more rational approach on the EIA edict and refuse proprietary price design and compete they will outgrow RJFS and LPL who may be at peaks for growth. Perhaps you get so big that you become forced to become more of a wirehouse. Our emotions don't matter but if the trend of independence gets defined like this more bad will follow.
Grow a spine duke#1 you must know I'm correct on the facts. Stand up for production and tell them where to get off.
 
 
 
 
 
 
 
 
 

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Farmboy, as predicted you're doing your "yeah, but..." routine again.  I very directly answered your question with a specific example.  I could have given you another like IPOs, but didn't because I knew you'd whine that it wouldn't fit your definition of "packaged" product.  But, in any event, sorry the direct answer to your direct question wasn't to your liking.
Regardless, what's the point of this so all important question of yours?("Tell me when RJ has mandated it's own pricing design on a packaged prospectus street product?")   Even if RJ had never ever tried to dictate pricing on prospectus items before, how does that affect their ability to make another decision going forward?   I guess you must be a virgin, because if you've never had sex before that must mean that you can't have sex in the future.  All of this ties into what I opined in an earlier post about you, and that is it just seems like you have difficulty in dealing with change.  If it's been done before, you're comfortable with it.  If it hasn't been done before you're opposed to it. 
You keep saying words to the effect that RJ is rolling over, caving in, and being too cautious in the face of regulators.  Have you forgotten the position RJ took with the Herula case?  Most firms would have rolled over, acknowledged they had a broker who had helped facilitate an illegal scheme by a client, and settled with the regulators.  That's the norm in our industry; pay the fines and get on with life.  RJ instead declined to settle, and in the face of that refusal the SEC increased the damages they were looking for and gave an additional charge of fraud against RJFS.  They didn't roll over even after that.  They fought the SEC before an adminstrative law judge and were proven right.  All they got found guilty of was lack of supervision relating to unauthorized use of company letterhead by the broker. You'll probably disagree and give me another "yeah, but...", but I'd view what RJFS did as the farthest thing from rolling over in the face of regulators, and the industry is probably the better for it.
In fact, as you should know, RJ's decision to attempt to get the insurance industry to restructure VAs was motivated fearing that sooner or later the regulators will make the changes for us.  I for one would much rather have those changes come from within the b/d community than have some regulator impose them on me.  Sure, RJ could have been passive on this VA cost issue, but they chose not to be.  Ironically, based on what you've written, if they didn't attempt to do this and we get regulator imposed mandates, you'd probably be among the first to ask: "why didn't my b/d try to do something?.   
I've got a perfectly good spine, Farmboy.  And, I don't believe you're anywhere close to being "correct on the facts".  I'd suggest YOU get a spine instead of continuing with your incessant whining about your view of RJ and the state of industry.  You're obviously passionate about this, and that's good.  But, if you haven't done so, be brave enough to engage RJ management.  Go to Chet or Tom, because this was an RJ decision, not an RJFS one.  Hear them out & let them hear you.  At the end of the day you may have gained a better perspective for their decisions even though no one's mind may have been changed.  Assuming you still disagree, still feel there's a selfish agenda and some Machiavellian plot behind all this, and still feel distrust in RJ's management, then YOU get the spine and find a b/d that you can trust.   
You can think that all I'm doing is toeing the company line on this.  That's your perogative.  But, as I said before, I trust these guys and while we've had to agree to disagree on certain things from time to time, I have confidence they're truly working for the best.  You apparently don't share that trust and confidence & that's your perogative.  So, you and I will also have to agree to disagree.
I'm done on this. 
 
 

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So they took a stand on Herula, and I'm glad they did.  But, one still wonders how they didn't catch him sooner.  There was some funky sutff going on there.
Too, one has to ask why they allowed him to affiliate with RJFS in the first place...other than the obvious answer of $$$.  From waht I understand he tried to affiliate with at least one other major indy firm and they took a pass.

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Joe, yeah you'd think he could have been caught earlier, but the "funky stuff" probably contributed to the difficulty.  There apparently were off-shore accounts, multiple companies, European companies, a Canadian, a Drefus Fund director, the son of the family formerly owning the Patriots, etc. -- a real complicated soap opera!  He's of course in prison now.
Don't know anything about Herula, but he was only at RJFS about 1 1/2 years before he was fired in early 2001.  Ironically, he wasn't even arrested until 2003, so I guess even the feds had a time with him.  At RJFS he was just a rep in an indy branch, and that usually indicates he didn't have the production to qualify for his own office.

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Duke#1 writes;
Even if RJ had never ever tried to dictate pricing on prospectus items before, how does that affect their ability to make another decision going forward?
Who doubts the "ability" of management to betray their contracted associates? When did I say that? It's simply that the effort is morally wrong, contradictory to all existing recruiting claims, poor pandering and opportunism of dreadful NASD priorities, poor long-term direction by emulating large firm culture that most here sought to escape from. Who said they didn't have the ability to try? Only the market (dealers really competing on independent themes) and perhaps a little reason can reverse this folly before the carnage really get going.
Then why even discuss the topic at all duke#1? With that much faith you want give the firm and discretionary regulatory authority you might as well not be bored with the debate of ideas here. With this definition of authority you are willing to concede RJFS is really nothing but wirehouse and all the recruiting covenants accumulated and hyperbole about "independence" are close to worthless with a standard such as this.
This is how you concede points? Talk about a "yeah, but" presentation. To you it's nothing at all that the independent of firm agenda prospectus goes away all together. I'm sorry I'm not going to follow you into serfdom so quietly.
RJ is making massive investments in "compliance" which is really a coded term into transforming RJFS into another mega neurotic wirehouse with various twists and illusions to the contrary. It took all kinds of creative energy to invent the brown wrapper proprietary VA move that we have debated here. Millions of firm dollars are going to be wasted on this VA effort to further justify truly "obsolete" costs which are what the salaried people in Florida dedicated to imagining they can observe a million new activities through technology and report requirements with every cost buried in ticket charges that never seem to go down and capturing every productivity increase technology has provided. The right move for RJ would be to turn buildings 3 through 5 into a hotel and renounce the big wirehouse firm agenda being shilled here by you. In the end it's the survivability of the independent advisor concept that is both at stake and the potential salvation of the situation. The death spiral NASD/RJ game plan of addressing every bad out come with ever more irrelevant rules to be enforced by ever more irrelevant mediators dressed as consumer advocates on firm salary has to be turned back. Some compliance yes, smartly crafted compliance yes but this?
By the way, you claimed you like "c" shares which I happen to know are also in the "task force" agenda. You bet there is clown from any number of sources who want all trailing and 12-b1 income BANNED. Gee, maybe RJ should try to placate them now, in your best interest of course, with a 30% firm reduction and you'll shout thank you master!? I really don't think you're a producer at all. The double speak is too clearly management and salary view to even give you the benefit of the doubt as read some of this stuff.
Hopefully your glee you have expressed for the band of brother of the NASD are going to stick together so no RJFS producer can walk for choice under this concocted regulatory make believe will be refuted. So when we hunt this down later and count the millions of dollars of lost recruiting opportunities, millions in departed brokers you might sing a different tune when the pink slip comes your way. Clearly you want to be a "them" instead of "us" but just remember it's the "us" that are counted on to pay for for the toadstool culture envisioned and supported by you. Beaten up as they are markets still exist. B-SHARE CAPS were stupid priorities industrially but they did go uniform quickly, a further decline of reason but a break for your argument in practice you believe. This is still a leap to custom in-house pricing on street VA issues at "independent" dealers that RJ is rolling the dice on. Time will tell. Insurance companies aren't beaten down open end fund dependents of dealer distribution. If anything a smart insurance company could make quite splash here with some guts and brains. They have money too and can kick NASD butt as well as any bank can. Look for a an independent advisor super power to emerge from this sector. They'll simply rent wall street services as truly independent producers flock to a better independent culture. It's that better culture that prompted the two fastest growth segments in the last five years; EIA and VA product lines. I know already duke#1 you'll start railing at the silly insurance concerns and abuses that are obvious there as well, spare me, but this RJ pig can't fly. It isn't bond spreads, b-share caps, breakpoints. It the big Kahuna; proprietary product models and a wild grab at advisor authority to make business decisions dressed up as "compliance" due diligence.  
 
 
 
 

 

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Farmboy, as I've said before you've got a lot of passion about this and that's good up to a point.  However, I believe your passion is coloring your reasoning and you're losing your objectivity. 
For example, you said: "RJ is making massive investments in 'compliance' which is really a coded term into transforming RJFS into another mega neurotic wirehouse".  You're "shooting the messenger" (RJ), Farmboy, when the source of that message is the regulators and the Spitzers of the world.  Perhaps you haven't been in the business very long, perhaps you're not an OSJ w/ RJFS putting your license & personal financial resources on the line every day in supervising other FAs, or perhaps you just aren't aware of what's going on in the industry.  But, the fact is that ALL firms are ramping up their compliance resources, not just RJ.  I think it'd be a safe bet that we'd be hard-pressed to find any rep on this forum who can say that compliance hasn't gotten stricter or more onerous over the past few years at their b/d. 
Try to learn what's going on in our industry before piling on your own b/d.  There's probably not an issue of Registered Rep that doesn't have some articles focusing on regulatory actions.  Here's just a couple recent ones that will give you a pretty good "state of industry" overview:  http://registeredrep.com/mag/finance_crusade_against_indies/ index.html
http://registeredrep.com/news/cox-addresses-sia/
Farmboy, you can continue with your diatribes about RJ if it makes you feel better.  But, as I said before, this won't solve anything for you.  All you're doing is venting your frustrations.  You can control your business destiny.  But, to do so you have to ACT.  It's like when one of my son's kept complaining about his boss and how he was  inequitable in how he better treated and paid other employees who weren't doing as good a job as he.  I told him he had 3 choices.  He could keep complaining & remain unhappy & let the situation fester (sp?), or he could have a heart to heart talk with his boss to make him aware of these inequities (real or perceived), or he could quit & look for a better situation.  To his credit he spoke with his boss, and fortunately the boss acknowledged that he had been too busy to do the best he could, ended up implementing a comprehensive & objective job performance evaluation system, and gave my son a raise!
My son acted to resolve his problem.  You can do the same.

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It's still kind of hard to believe you have a clue about what you are talking about after reading this;
To his credit he spoke with his boss, and fortunately the boss acknowledged that he had been too busy to do the best he could, ended up implementing a comprehensive & objective job performance evaluation system, and gave my son a raise!
RJFS independent contractors own their businesses. They are self-employed risk takers.
You might think it unrelated but there are plenty of psychologies RJ could be focused on to help protect advisor interests but instead they want (like you in this last foolish post) to condescend to their business associates as if they were kitchen help. 
http://today.reuters.com/news/newsarticle.aspx?type=domestic News&storyid=2005-12-01T191236Z_01_BAU169104_RTRUKOC_0_U S-RETAIL-WALMART-POLL.xml&rpc=22
Instead it's the pathology of Elliot Spitzer, John Boggle, Suze who are pushing Rj and dealer professionalism into robot culture that you clearly represent. Will see where RJ ends up when the business people get driven out and the likes of you are what remain.  
 

Farmboy's picture
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Joined: 2005-11-02

From the cox article;
The market excesses, the accounting scandals, questionable behavior across a wide swath of industries all have demanded—and received—a stern regulatory response. No regulator in this environment could risk being seen as less vigilant, less aggressive or less committed to punishing the guilty.
Right! They didn't catch plenty so let's focus on everyone and everything. Just remember to start at the bottom first even though clearly it's going to be worse when more filters through the central offices by worshiping the canard of "more regulations" as a solution to specific acts that are already illegal. Why this sells as "action" is hard to figure. How accounting fraud, insider trading, check kiting, CEO fraud, market timing, sleazy dealer kickbacks from fund vendors and insurance companies ands of all things market fluctuations lead to "time to crack down on individual advisor's" is Orwellian in nature. 
At least I'm fighting insanity Duke#1 while you fiddle in a delusions.
 

 

Duke#1's picture
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Joined: 2004-12-06

Farmboy, the story about my son was an analogy trying to serve as a message to you -- it had nothing to do with RJ or being independent.  The point you lost in the story was that my son made a decision to act, rather than continue his complaining.  That's my message to you. I'm sorry my analogy was too subtle for you to understand.
When you go off on regulators, Farmboy, you're preaching to the choir here.  As I've said repeatedly to you, I'm as distressed about our regulatory environment as anybody.  And so is every probably every rep and every b/d.
Your post again says RJ should "help protect advisor interests".  Where you & I differ is that you see every step RJ takes on the compliance front as being a way to control us and detract from our independence.  I see those steps as a way to protect me.  That's part of what I'm paying them for.  If RJ didn't do some of things they've done to help protect us, and you ended up getting fined, suspended, etc. for some action you took, you'd now probably be complaining that RJ dropped the ball and didn't do enough to protect you! 
For example, you harp about RJ taking an early lead among b/ds to put in b-share restrictions, and this was another example of them supposedly pandering to the regulators.   I say thank goodness they had enough foresight to put in those restrictions, or else RJ and certain of its FAs (including maybe you) would be looking at fines, etc. like a number of other reps and firms which have been subjected to b-share violations.  RJ was smart enough (or lucky enough) to early on see the lay of the land with regulators re their concern with b-shares.  We dodged a bullet because they acted early.
Mutual fund revenue sharing problems are another major instance where RJ dodged a big bullet because of how they chose to operate.  That's why you don't see them on the long list of so many firms including the LPLs, Jones, etc. of the world who got fined.
These and every other instance I've given you in prior posts are facts, Farmboy, not delusions.  I know you can't or won't see them that way.  So, once again I suggest you ACT and stop complaining, because your complaining on this forum, around the water cooler, to your wife/girlfriend etc. doesn't serve any positive purpose in correcting the Machiavellian agenda that you seem to see RJ following.  If you really feel that RJ is treating you so badly, if you really distrust them so much, then find another b/d that's more to your liking.  It's as simple as that!

Farmboy's picture
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Joined: 2005-11-02

In the end duke#1 you're willing to accept the decline of the advisor's choice and the contract rights that were negotiated between dealers and contractors based on gratuitous regulatory culture that pass these burdens, cost and restriction onto the more innocent and less corrupt and will lead to even more consumer abuse.
The NASD is both a trade association (for dealers not advisors) as well as a regulatory authority. You've conceded my claims but reverted to the lowest forms of rhetorical "yeah, but" rationalizations, smears and condescension imaginable.
The new VA design is proprietary in nature. It violates the recruiting covenants and principals of the firm. It should be reversed. The b-share analogy is absurd on the face of it as this did not create a new and more restrictive proprietary product but specific rules for existing products. The policy is also deeply flawed industrially but that is another subject.
Smear away, your argument hold little weight.
 
 

$$$$$'s picture
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Joined: 2006-11-10

btw way duke#1 the annuity business hasn't been hit yet. In fact LPL has stated they will not follow suit with RJ's annuity move. Also you can still sell eia's as well as other fixed products outside lpl

FreedomLvr's picture
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Joined: 2006-02-10

Actually $$$$$, LPL requires you to place all EIA business through them as does RJFS.  The big boys aren't taking any chances with them, and have approved product lists.

gad12's picture
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Joined: 2006-12-06

$$$$$ or Freedom, or whoever, does RJ  still allow you to sell traditional fixed annuities outside?

$$$$$'s picture
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Joined: 2006-11-10

what EIA are allowed at LPL or RJ?

FreedomLvr's picture
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Joined: 2006-02-10

AS far as I know both LPL and RJFS allow you to sell traditional fixed annuities away (as long as you disclose it as an OBA), just not EIA's.
Both have their own approved lists and you'd have to check with the firm.  I know that a lot of firms are going by a "10-10-8 rule": No products with a surrender period longer than 10 years, no CDSC greater than 10%, and no commission higher than 8%.  Oh, and I think the insurance company must be in the "A" rating range.

$$$$$'s picture
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Joined: 2006-11-10

freedom,
Are you with RJ or lpl and if so how do you like them
 

FreedomLvr's picture
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Joined: 2006-02-10

I like them just fine, thanks for asking!

$$$$$'s picture
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Joined: 2006-11-10

I guess that's a big confidential piece of information your holding back.

Indyone's picture
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Joined: 2005-05-31

...Am I imagining things, or has Raymond James taken over sponsorship of this site?!!

planrcoach's picture
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Joined: 2006-12-13

...Am I imagining things, or has Raymond James taken over sponsorship of this site?!!
I didn't see any blue and yellow banner ad with a half bald guy getting a GDC haircut, advertising RJ.
It's like that Twilight Zone epside I saw when I was a little kid, the frightened people who were talking did not know they were being watched by a giant little girl, from the other side of her doll house. Her giant eye pressed up against the window...

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