Any truth to recent comments regarding EJ "Advisory Solutions" sales practices?
36 RepliesJump to last post
My office (independent) has had some interesting conversations with current and former Edward Jones advisors this last week regarding practices pertaining to their "Advisory Solutions" platform. One advisor cited this as one reason why he left Jones (California), another cited this as one reason he is about to leave Jones (Washington), another confirmed that he has heard this discussed at the "water cooler" (Utah), and an advisor local to us was only willing to say that it wouldn't surprise him if this was the case.
(sales practice concern removed by pohsuwed)
Not being on the inside I can't confirm that this is true. Likewise, I can't confirm whether it is an advisor-directed scheme or if it comes from the partnership. However, it really wouldn't surprise me if it came from the partnership considering the geographic reach of these conversations. Back in my Jones days the firm would preach how bad wrap arrangements were. Eventually they added one of their own to increase their income on their latent 0.25bp trail assets. With this new revelation they are showing that they are realizing that they still rely on up-front commissions to survive or just that they are greedy and willing to skirt the rules. I just feel bad for the Edward Jones late adopters to "Advisory Solutions" who will be left out in the cold when Jones feels they have enough wrap business and in turn decentivize advisors who still rely on A-share business.
I left Jones because I was tired of preaching the company line diligently only to be upended at the next meeting. Yes, everyone needs to expect progress, but when you preach something as adamantly as they do only to change with the next change in the breeze they show their rainbow kool-aid colors. On the independent side, I preach my own beliefs that I'm willing to support, defend, and if necessary, admit that I have changed. It is much more pleasant to function this way than being a minion to the machine.
Unfortunately I felt the need based on the previous "stupid olympics" comment to remove the meat of my question which was a sales practice that has been described to my office by several advisors. While my motive for removing the content was out of concern that I may have posted inappropriate comments on the message board, it really is unclear just why "ytrewq" felt my comments were "stupid". I'm guessing that his reasoning for his comment is to suggest that I've made an inappropriate comment.
Interestingly, though, I have considered that it might just be that he is a simple schoolyard bully who, when he can't think of anything fitting to the argument just calls people "stupid" or "ugly".
At least I can spell "medal".
I would love to hear more about this practice. I've come a long way since 10 contacts for an iPOD or turkey but this is interesting. Does anyone wonder why the public compares us to used car salesmen?
Laugh if you want to but the Burgers Smokehouse Turkey would get you to make some calls.....
[quote=pohsuwed]Interestingly, though, I have considered that it might just be that he is a simple schoolyard bully who, when he can't think of anything fitting to the argument just calls people "stupid" or "ugly". [/quote]
Post whatever you choose and don't let a stranger intimidate you. Your choice to remove part of the post will cause you to loose creditability in anything else you comment on...
As for ytrewq, he is not the school yard bully... just someone drowning on kool-aid.
Sicne you deleted the comment, I have no idea what you are talking about. It's a MFD wrap program. We can choose to use it or not use it. Obviously they are giving it a lot of press internally to encourage its use. But other than that (and since that's not a crime or even deceitful...) I'm not sure what makes this program different than any other wirehouse or other B/D wrap program.
poh - how about you man up and repost your original comments. ytrewq can be a little abrasive, but his heart is in the right place. And if you want to have a conversation about Advisory Solutions, he'd be the one guy to do it with. I'm guessing he's got more in it than anyone else here.
So, thicken up that skin and repost your concerns. Let the rest of us figure out if you should win the stupid Olympics Gold Medal or not.
I read his comment . Basically said that Jones guys were being told to sell A shares to a client and put in a to-do 2 years later to phone and sell him a stock. Once you have that conversation, position AS or something like that. i though AS was a mutual fund wrap with some etf's in it only, can't even hold stocks?
MB,
Yes, it's jsut a wrap with funds/ETF's. They are rolling out a UMA late this year.
I assumed that's what he meant about the "sales issue". To address it, you will always have those "professional salesmen" that will advocate stupid stuff. No firm has the corner on that market. But there is NOTHING coming out from Jones even SUGGESTING to commission them and then switch to Advisory in 2 years. Obviously that is what some people are DOING, but it does not mean that it's what Jones is ADVOCATING.
I'm not sure what he means about stocks though. I've never heard that "strategy".
Okay, Spaceboy. Here it is:
The concept that has been explained to me is that advisors are instructed initially to sell A-shares to their clients. At that same time they set a "trigger" in the contact management system to "sell stock 'XYZ'" two years into the future. "Stock XYZ" would be a stock that the advisor wouldn't otherwise attempt to sell to a client--this way, when the advisor sees this note in the system two years from that point in time they realize that the note really wasn't about selling the stock, but moving the clients from the A-share funds into Advisory Solutions. Using this method the advisor earns maximum on the A-share sale, and then in the minimum appointed time to pass the two-year rule transitions the client into Advisory Solutions. If this is true even to a small degree, this type of pre-meditated manipulation of the rules for the benefit of the firm and advisor clearly isn't acceptable.
In our time at Jones we recall top advisors getting up in meetings discussing how certain fund families paid better revenue sharing than others, therefore we needed to sell those fund families. Therefore, this Advisory Solutions game is absolutely no surprise to me. My only question is whether this is just an issue of renegade advisors or whether this is a broader issue at Jones. As I said, we had this same discussion with advisors across a broad area so we think it is not just a one-off occurance. But then again, this whole issue is third-person to us.
In a private conversation with ytrewq I understand that sometimes being a Jones advisor on the forum can be difficult being a continual target of bashing. In a way I might suggest that Jones asks for it. When the firm continually pumps into advisors that they are the best using manipulative information, it can sometimes be hard for them to understand other viewpoints. For example, Jones like to suggest how smart their advisors are for joining such a great firm. This is just like the one-sided and manipulative "missed good days" analysis. If Jones thinks their advisors are so smart, why tell the advisors that in going independent they are responsible for their own overhead and that it's just not worth the risk? After all, Jones advisors are still held accountable for their overhead and branch profitability on their P&L (along with the firm overhead). Obviously, the most appropriate statement is that depending on how efficient an advisor is in managing their practice and their overhead expenses they may do better, or may do worse as an independent. Furthermore, the higher the revenue the better the ratio of revenue to overhead expenses (which are largely fixed expenses). Therefore, the more senior advisors would have potentially even better opportunities as independent advisors. This is a rational and open viewpoint to have. Unfortunately, the closed viewpoint of the firm in this area suggests to me that they are generally closed-minded in other areas as well.
I'm not saying everyone should be independent. Frankly, I know plenty of Jones advisors that really should stay there because the clout of the firm helps them overcome their own idiocrity. Likewise, I know plenty of independents that just don't have the skills or the business mind to operate on their own. The best thing that happened in my career is that I doorknocked into one of the "devil children" advisors who left Jones years before I joined. We immediately struck up a great relationship, even though he giggled at my question as to why he would ever leave such a great firm. From this relationship I realized that everything the Jones advisors said about this guy were false and exaggerative. It really is a great example of groupthink.
Hey Boyscout,
Couple things: I think that whole "make a note to sell a stock in 2 years and it really means to switch to AS" is probably isolated. Now, it may be isolated to your entire region, but I have honestly NEVER heard something so absurd. I won't say it doesn't happen, since I am sure you're not just making it up. But for the vast majority of FA's (at least all the one's I know, which is most in my region), there has been NO discussion of anything like that. Yes, some people talk about existing clients that might be appropriate candidates to move into Advisory Solution today. But let's not forget, when the wirehouse world switched to fees en masse maybe 10-15 years ago, some firms (FA's) switched entire BOOKS into fee-based programs.
As far as indy life being better, there will always be circumstances where going independant will be better and more profitable for a Jones FA. That has been debated ad nauseum and agreed to on this forum. And yes, some guys (Jones, wirehouse, wherever) that could NEVER go indy. They don't WANT to, they don't want to run a business, they don't know HOW to run a business, and they are perfectly content working 6 hours a day making a few hundred large and not having to worry about anything else.
Now get back to your strings...
I am going to do a better job of trying to be tolerant of other peoples opinions.
I am going to do a better job of not making smart comments when I disagree with someone.
I am going to assume all questions asked are legitmate and not framed to lead an answer.
I am going to believe people are sincere when they comment. No matter how ridiculous the comment.
I apologize to all I have offended. If I can't say something nice I will say nothing.
That was really hard to type but I am going to try to stick to it. Be patient with me.
PS: I am going to learn how to spell "Medal" not "Metal". Guess I am the one winning the gold now.
In my region I have heard one of two advisors suggest that they were going to continue to sell A shares, and then later move their clients over to the Advisory program. As for this being something that the firm is promoting, absolutely not. In fact, it would generate a reprimand from the home office if it was ever discovered that an FA in the field was promoting or doing this.
Whether or not this practice is openly discussed is irrelevent. The way we're compensated ensures that A shares are sold up front, all with the intention of switching to AS later. In the past accounts were(and are) churned from mf's to bonds to stocks. That's the only way seg 4's and 5's can be pulling big numbers. Now with AS, they can pull the switch and live off the 1%+ trails. Nobody can make a living on 10basis points. If Jones mgmt claims that this isn't true, they are either fools or liars. Face it, if that's how they compensate FA's then that's what they expect.
[quote=navet]
Whether or not this practice is openly discussed is irrelevent. The way we're compensated ensures that A shares are sold up front, all with the intention of switching to AS later. In the past accounts were(and are) churned from mf's to bonds to stocks. That's the only way seg 4's and 5's can be pulling big numbers. Now with AS, they can pull the switch and live off the 1%+ trails. Nobody can make a living on 10basis points. If Jones mgmt claims that this isn't true, they are either fools or liars. Face it, if that's how they compensate FA's then that's what they expect.
[/quote]
In coming up with the name "navet" were you really trying to spell "naive"? I am just a lowly seg 4, but I have not put an order in mfds over $50k in nearly a year. I am still "pulling those big numbers."
It must be tough to be a failure, but at least you have the internet to take unfounded jabs at Jones....
[quote=noggin]
Really the Burgers Smokehouse turkeys are the best!!!
[/quote]
You left too soon. They expanded the choices to include a ham or a cheescake (my personal favorite).
You can sell whatever you want and you can say whatever you want (so long as it's legal) to your clients. OP is retarded - you don't have to regurgitate the EDJ philospohy if you don't want to.
[quote=Incredible Hulk]
[quote=navet]
Whether or not this practice is openly discussed is irrelevent. The way we're compensated ensures that A shares are sold up front, all with the intention of switching to AS later. In the past accounts were(and are) churned from mf's to bonds to stocks. That's the only way seg 4's and 5's can be pulling big numbers. Now with AS, they can pull the switch and live off the 1%+ trails. Nobody can make a living on 10basis points. If Jones mgmt claims that this isn't true, they are either fools or liars. Face it, if that's how they compensate FA's then that's what they expect.
[/quote]
Learn to read jackass, or is that not required at Jones? That's right, a lot of you don't have degrees. I don't care how much you put into mf's. In order to survive, you either have to churn or consistently bring in lots of new cash. Mf trails are tiny, and I talk to enough friendly wholesalers who see what you guys are doing.
In coming up with the name "navet" were you really trying to spell "naive"? I am just a lowly seg 4, but I have not put an order in mfds over $50k in nearly a year. I am still "pulling those big numbers."
It must be tough to be a failure, but at least you have the internet to take unfounded jabs at Jones....
[/quote]