Leaving Jones
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[quote=B24]
Yeah, I don't pay much attention to articles that old. But there is SOME truth to the article. And it is interesting that it was written by the Managing Partner of an investment management firm.
I agree that culture is important to the overall direction of a firm. But I think the skill and integrity of the individual advisor is more important. No single firm has the corner on that market (nor the market for bad advisors).
[/quote] The article does throw out that caveat. There's bad apples in every cart, so to say. But come on, I know you work for Jones. Can you honestly tell me that the firm philosophy has changed any since the article was written? If you think so, you need to remember to watch the Market Updates and read a few recent Strategy Reports. As to "Managing Partner of an investment management firm", I found it more profound who actually published the article. The Motley Fool's purpose is in life is to TRY and educate people to a point where they don't need to pay for our services. It is one of their founding principles.Hank - all B is trying to do is dilute the Kool-aid a little bit for you.
I would be more worried about projections like 25000 brokers. Being 12000 short a year before the end of the decade is statistically significant. I only hope those on the Investment Policy Committee aren’t screwing up that bad on their investment recommendations.
It’s probably not the same people doing the IPC stuff though, just the same philosophy.
[quote=B24][quote=Hank Newbie][quote=Wet_Blanket]…become the seventh largest securities firm in the United States based on number of brokers (approximately 8,400 at latest count, growing by four a day, with plans to hit 25,000 by the end of the decade).
How close are they to the 25,000 mark?[/quote] Hind sight is always 20/20. Jones stands somewhere around 13,000 FAs now. What has the growth looked like at the other firms? Wait, most of them got absorbed into banks. As of 2007-08 we were #3 in the number of brokers. With what has happened since, well, you get the idea. As far as I know, we are the only major firm with an ambitious broker growth strategy, and the capital to back it up.[/quote] Newb, be careful about the assumptions you make. Growth for growth's sake is not always good. And growing organically is painful at best. Every firm is trying to grow. Some grow through attrition of underperforming prodcuers and trying to raise the AUM/production per broker, some try to grow via acquisition. And few, like us, grow organically. But don't be fooled into thinking that growing organically is somehow more virtuous than growing via other methods. It's like saying that starting from scratch versus inheriting a book or joining a team is more virtuous. [/quote] This is one area where I am definitely not a "Newb". I may be new to this job, but am not new to the field of finance, so to say. I don't think organic growth is somehow more virtuous. A good marriage that fits can be tremendous. On the other hand, what the industry has seen recently have been a string of shotgun weddings. I think you will have to agree that more often than not, growth through M & A, while faster, is much more costly, not to mention the heartburn and bad will it can create among both employees and clients. Think of the old fable about the Hare and the Tortoise!Moraen, maybe its because people like you decided to leave! On a serious note, grape and cherry are my favorite flavors.Hank - all B is trying to do is dilute the Kool-aid a little bit for you.
I would be more worried about projections like 25000 brokers. Being 12000 short a year before the end of the decade is statistically significant. I only hope those on the Investment Policy Committee aren’t screwing up that bad on their investment recommendations.
It’s probably not the same people doing the IPC stuff though, just the same philosophy.
[quote=B24]
Newb, be careful about the assumptions you make. Growth for growth's sake is not always good. And growing organically is painful at best. Every firm is trying to grow. Some grow through attrition of underperforming prodcuers and trying to raise the AUM/production per broker, some try to grow via acquisition. And few, like us, grow organically. But don't be fooled into thinking that growing organically is somehow more virtuous than growing via other methods. It's like saying that starting from scratch versus inheriting a book or joining a team is more virtuous. [/quote] I don't know about "virtuous" - is it even legal to use that word when referring to this industry? - but I'd have to say that joining a team would more than likely give the newbie their best shot at being around three years later.Borker, I totally agree. That is my point. Just because we all start with zero at the beginning of our careers, or because Jones grows organically, does not make us as FA’s, or Jones as a firm, “better” (I will avoid the word “virtuous” for you).
Sometimes I just wish Jones would just let the culture speak for itself, and not constantly have to convince newbies that we have the best culture. Newb, One thing you might NOT be aware of is that approximately HALF of our 12,000 FA's have been with the firm less than 5 years. So really, the other half of the firm is propping everyone up.[quote=B24]Borker, I totally agree. That is my point. Just because we all start with zero at the beginning of our careers, or because Jones grows organically, does not make us as FA’s, or Jones as a firm, “better” (I will avoid the word “virtuous” for you).
Sometimes I just wish Jones would just let the culture speak for itself, and not constantly have to convince newbies that we have the best culture. Newb, One thing you might NOT be aware of is that approximately HALF of our 12,000 FA's have been with the firm less than 5 years. So really, the other half of the firm is propping everyone up. [/quote] Thanks for the props, man!! I would assume that this is just the way the industry works if you want to grow organically. If you want to go out and buy some regional offices of other firms (I think Stifel and Nicholas just did that), you have to spend capital. One way or other, it costs the owners, in this case the LPs and GPs at Jones have to forgo money that could be distributed in order to pay for newbie training, initial salaries, and branch expenses to profitability levels (I'm assuming you are already there at the LP level). For me, I have been hesitant to tow the corporate line blindly. That was the reason I was pleasantly surprised to read the article published by a source that I KNOW is pre-disposed to be biased against ALL full service firms. In the end, I am not blind to the fact that results on a personal level are much more about me and my performance as an individual FA. You can work for the best firm in the world and if you suck, you suck. As I said originally, this was just for all the Jones Haters out there, and for those new Jones FAs who were starting to wallow in doubt as to what they had gotten themselves into."Has no pressure to meet earnings expectations since it's a private partnership, not a public company."-Motley Fool article
And you believe that? Was EJ non-profit when Bachman was around?Jaxson, you’re right. But the real point is true, that they don’t have to do silly things to massage earnings and manipulate results to please Wall Street each quarter, since the ONLY thing that matters in a partnership is cash flow. Who cares if you earned a billion dollars this year, but don’t have the cash flow to distribute and pay for the tax hit.
Private firms (in all industries) have some definite advantages, but also some distinct disadvantages.Edward Jones’s strategy is to be precisely the opposite. In particular, the company:
Does not have any in-house mutual funds or any other proprietary products.
Except the pay to be listed on the preferred funds.
Does not sell options or commodities,
So they lack investment options??
does not pay its brokers for trades of over-the-counter stocks with prices below $4.
But will recommend WORLDCOM, ENRON and others as part of their buy and hold philosophy
Has no pressure to meet earnings expectations since it’s a private partnership, not a public company.
Tell that to the FAs who are suppose to be getting profitability bonuses
Encourages its clients to have realistic expectations, focus on the long-run and ignore the short-term vagaries of the market.
Or last ten years if your American Funds were waited to heavily in international and only did well because of the decreasing dollar.
As a result, its clients hold their mutual funds an average of 20 years, far more than the 3-5 year average for other brokerages.
Until the rep has a bad month and needs to “diversify” into another preferred fund company
Several folks in my region are making their months right now by moving funds into VAs.Edward Jones’s strategy is to be precisely the opposite. In particular, the company:
Does not have any in-house mutual funds or any other proprietary products.
Except the pay to be listed on the preferred funds.
Does not sell options or commodities,
So they lack investment options??
does not pay its brokers for trades of over-the-counter stocks with prices below $4.
But will recommend WORLDCOM, ENRON and others as part of their buy and hold philosophy
Has no pressure to meet earnings expectations since it’s a private partnership, not a public company.
Tell that to the FAs who are suppose to be getting profitability bonuses
Encourages its clients to have realistic expectations, focus on the long-run and ignore the short-term vagaries of the market.
Or last ten years if your American Funds were waited to heavily in international and only did well because of the decreasing dollar.
As a result, its clients hold their mutual funds an average of 20 years, far more than the 3-5 year average for other brokerages.
Until the rep has a bad month and needs to “diversify” into another preferred fund company
Several folks in my region are making their months right now by moving funds into VAs.[/quote] To end this thread, I like EDJ's philosophy. It was what was taught in college (finance degree). I liked Motley Fool as an individual investor (for the same reasons), but alas, in the last 2 market crashes I let my 2 lagging 401K's languish in Index Funds. Not enough time with a busy schedule/home life to put much thought into it. BTW, what is the problem with American Funds on this website???[quote=chief123]Edward Jones’s strategy is to be precisely the opposite. In particular, the company:
Does not have any in-house mutual funds or any other proprietary products.
Except the pay to be listed on the preferred funds.
Does not sell options or commodities,
So they lack investment options??
does not pay its brokers for trades of over-the-counter stocks with prices below $4.
But will recommend WORLDCOM, ENRON and others as part of their buy and hold philosophy
Has no pressure to meet earnings expectations since it’s a private partnership, not a public company.
Tell that to the FAs who are suppose to be getting profitability bonuses
Encourages its clients to have realistic expectations, focus on the long-run and ignore the short-term vagaries of the market.
Or last ten years if your American Funds were waited to heavily in international and only did well because of the decreasing dollar.
As a result, its clients hold their mutual funds an average of 20 years, far more than the 3-5 year average for other brokerages.
Until the rep has a bad month and needs to “diversify” into another preferred fund company
American Funds are the greatest! Just give them a chance.
I do think they have nice marketing pieces but their funds appear to be more asset allocation funds to me. Not very style pure. Plus, they make you wait a year on 12b1 fees … screw tha
Franklin seems to be good and well respected in my region. Plus their IRAs are only 15.00 per year.
I don't believe there's anything necessarily wrong American, but during tough times like these, those 12b1's can't hold a candle to a fresh new commission from a Hartford VA.
Crooks.[quote=Borker Boy]
I don't believe there's anything necessarily wrong American, but during tough times like these, those 12b1's can't hold a candle to a fresh new commission from a Hartford VA.
Crooks.[/quote] Dude, in all seriousness let it go. Make a change and let go of this baggage. Not everything that Jones does is bad and conversely not everything they do is good. Find a place that you can believe in and go for it. This self loathing and bitterness is a sickness that will take down your soul. You are better than that.[quote=Borker Boy]
I don't believe there's anything necessarily wrong American, but during tough times like these, those 12b1's can't hold a candle to a fresh new commission from a Hartford VA.
Crooks.[/quote] I've been one of those guys who moved assets from American, et al to a Hartford VA or something like it. There were a few months in there that I moved a couple big chunks and it did make my month. The only ones I've ever moved have been for the folks who are looking for income in retirement. Guaranteed income. If you don't understand the difference between a 4-5% systematic withdrawal from American Funds and a guaranteed 5% or more withdrawal from Hartford or the others, then buddy, you're in the wrong business. Those folks are some of my happiest clients. I get to sit across the desk from them and grin when I tell them that their income stream hasn't been affected by this downturn in the least. I look like a genius. And if you didn't at least offer that scenario to your clients, then you are a fool. I think of it the same way I do LTC. If I don't offer it to them and let them make a decision on whether or not they want it, then it's my fault when their kids decide to take me to arbitration for not offering it to them.[quote=chief123]Edward Jones’s strategy is to be precisely the opposite. In particular, the company: Does not have any in-house mutual funds or any other proprietary products. Except the pay to be listed on the preferred funds. Does not sell options or commodities, So they lack investment options?? does not pay its brokers for trades of over-the-counter stocks with prices below $4. But will recommend WORLDCOM, ENRON and others as part of their buy and hold philosophy Has no pressure to meet earnings expectations since it’s a private partnership, not a public company. Tell that to the FAs who are suppose to be getting profitability bonuses Encourages its clients to have realistic expectations, focus on the long-run and ignore the short-term vagaries of the market. Or last ten years if your American Funds were waited to heavily in international and only did well because of the decreasing dollar. As a result, its clients hold their mutual funds an average of 20 years, far more than the 3-5 year average for other brokerages. Until the rep has a bad month and needs to “diversify” into another preferred fund company
Several folks in my region are making their months right now by moving funds into VAs.[/quote]
That is just dumb. That is like buying long term fixed annuities for people because they want “safety”… problem is when inflation hits or the market rebounds that 3% guaranteed is going to look terrible and feel terrible on their spending habits.
VAs aren’t bad, but putting people in them because of a terrible market crash and so you don’t go on goals this month is borderline criminal.
[quote=Spaceman Spiff][quote=Borker Boy]
I don't believe there's anything necessarily wrong American, but during tough times like these, those 12b1's can't hold a candle to a fresh new commission from a Hartford VA.
Crooks.[/quote] I've been one of those guys who moved assets from American, et al to a Hartford VA or something like it. There were a few months in there that I moved a couple big chunks and it did make my month. The only ones I've ever moved have been for the folks who are looking for income in retirement. Guaranteed income. If you don't understand the difference between a 4-5% systematic withdrawal from American Funds and a guaranteed 5% or more withdrawal from Hartford or the others, then buddy, you're in the wrong business. Those folks are some of my happiest clients. I get to sit across the desk from them and grin when I tell them that their income stream hasn't been affected by this downturn in the least. I look like a genius. And if you didn't at least offer that scenario to your clients, then you are a fool. I think of it the same way I do LTC. If I don't offer it to them and let them make a decision on whether or not they want it, then it's my fault when their kids decide to take me to arbitration for not offering it to them. [/quote] What would you look like if the economy didn't have a downturn? I would hope the same. If that was the best option for them at that time. Looking back, I would agree.[quote=iceco1d]Spiff,
Do you really get concerned that you'll be taken to arbitration, and/or found liable, if you fail to offer a particular insurance policy to your clients? I could be wrong, but that sounds over the top. [/quote] Its what they tell him in training to help him sell it. The script goes like this: Client: "I'm not sure I need this right now. I don't think I'll need LTC at any point." Advisor: "Thats fine. Some people find it hard to grasp the fact that they aren't Superman. This type of insurance isn't something many people see value in until they actually NEED it. What I'll have to do then is have you sign this release verifying that I provided you your options and if you need this at some point, I can't be held liable." Client: "Wait, I need to sign this? Is this typical?" Advisor: "No, its not typical. Most clients that have a need for LTC understand the risk and decide to take action on this. I'd say about 1 out of every 10 clients I go over this with actually decide not to purchase the protection." Client: "Man, if its something that serious, I guess I probably need it. Where do I sign?" Never, ever, ever will it actually go this way. But the kool-aid drinkers take what their trainers say and the rockstar advisors who speak at their conferences as 24 karat gold. Hey, if it works great. If not, then take that script and make it your own and add your own lines.