The problem with adding more offices is it dimishes the value of the Jones name to the existing offices. There is little that is special about being at Edward Jones if there are twelve other offices within a stone's throw.

The usual pattern is the first advisor in town has a huge business. The second advisor has a big business. And the next ten struggle and compete for the same clients. So what is the value of the Jones name to the segment 3 and 4 advisors?

I think it depends on where you are.  Here in the hometown of the corporate headquarters, there's instant recognition from about 95% of the people I talk with.  Our name is on every corner, at every Cardinals game they go to, and on the dome the Sheep call home.  So we get a lot of ambient advertising just by being this close.  That's the value. 

An area with 12 EDJ offices within a stone's throw, like mine, has a ton of clients and assets to go after.  So much that just 3 or 4 offices literally couldn't handle all the business and do the right thing for the client.  If I break my area down by zip code there are 18,000 households in my zip code.  I can get to all of them in about 10 minutes max.  That area has $6.3 Billion in assets to go after, according to the Jones info.  There are 6 of us.  None of us have been here for more than 10 years.  I'm the second most veteran of the group and the guy right in front of me only has me by a year.  So, without dragging this out any longer, there are plenty of people for all of us.     

Spiff, I agree with you.  As I said before, to me it's not an issue of not enough business to go around - I live in a very small community (6000 in my zip), but my reach extends beyond that.  And there is wealth around here as well.  My point was that in a small community, it looks very silly to have 4 offices so close together, especially when i have plenty of office space for at least one of them (currently I still have one in my office, but he will be moving out soon).  And based on the way we do business, we could easily manage with one BOA.

Spiff, I'm in St. Louis also.  Along Manchester road I counted 8 different 1-man Jones offices in a 2 mile stretch.

If you do a 2 mile radius around my office (near Kirkwood) there are 15 Jones offices.  In one building there are 2 seperate offices and literally right next door (20 feet?) there is a 3rd.  It's a joke. 

A friend of mine entered the industry back in the mid-80's.  He opened up a new Jones office in a small town and worked his rear off for years making $40-$50k.  (For the first 3 years he barely kept the office open)  The markets exploded and his income boosted up to just over $100k.  What does Jones do?  They pluck two new Jones offices in his small town and his income plummets back to $70k.  He stayed with them, I don't have a clue why.  Now they are looking to open a 4th because the other 3 are surviving. 

Look, I won't argue with success. Spiff and 24, since you are doing well and knocking it out, and happy with the set-up, then more power to you.

But there does become a point where the quanity of offices becomes a bit absurb, like offices across the street from each other.

It reminds me of Vancouver, where there were more Starbucks than pedestrians. You could sit in one Starbucks and look across the street at another one. And there was one in the hotel lobby. And also, the coffee supplied in our hotel room was Starbucks.  I like Starbucks, but it kind of turned me off.  Now I drink Folgers.

Is it just me, or do the Starbucks and Edward Jones signage look the same, right down to color, lettering and even size?

[quote=American Flag]

Look, I won't argue with success. Spiff and 24, since you are doing well and knocking it out, and happy with the set-up, then more power to you.

But there does become a point where the quanity of offices becomes a bit absurb, like offices across the street from each other.

It reminds me of Vancouver, where there were more Starbucks than pedestrians. You could sit in one Starbucks and look across the street at another one. And there was one in the hotel lobby. And also, the coffee supplied in our hotel room was Starbucks.  I like Starbucks, but it kind of turned me off.  Now I drink Folgers.

Is it just me, or do the Starbucks and Edward Jones signage look the same, right down to color, lettering and even size?

[/quote]

Did you even read my posts?  What I SAID, was that I don't like the fact that we have so many offices.  I am fine with the number of advisors, as there is more than enough business for 4 JOnes advisors in my area (we also have every wirehouse, plus like 5 bank brokerages, two regional brokerage offices, two Ameriprise offices, and several indy brokers).  What I DON'T like is having 4 different offices in my itty-bitty town.  There is no reason we couldn't have maybe 2.  I never want us to look like wirehouses, with big offices with tons of brokers.  But a team of two is pretty simple, and still gives us that "local guy" feel.

Yes, I read your posts 24.  Don't know if multiple offices would be the solution either though. Now you are changing the thing that always defined Jones. I do agree as I have said too many offices become an eyesore and cheapen the brand. I am glad I am not involved in it anymore, that is for sure.

I had my EJ office with two newer offices within 1 city block away. If you go a bit farther; approximately 1 mile radius, there are three other branches. I obviously left. Customers always had jokes about us, neighborhood had jokes.
It kind of felt like we were the laughing stock of the investment industry. I felt bad for the newer guys knocking on doors trying to steal my clients. It never happened, and thank god for loyal customers informing me of what was being said.
I drank cool aid and no hard feelings but I am so glad I woke up.

maybe they should open an office at the peak of Mt. RAINEER. Alot of prospecting and door knocking up there and no competition. Just watch out for avalanches lol.

As a former Edward Jones financial advisor who also once worked in the home office (and still know people there in St. Louis), I'm really skeptical that the firm wants to continue opening up that many offices. Given that the firm has raised its production standards and the home office associates and general partners continually make veiled comments about getting rid of a portion of its Segment 3 and Segment 4 financial advisors (not to mention its FA revenue per day is down dramatically from a few years ago), it seems like the firm wants and anticipates getting rid of a lot of offices and FAs in the next few years.

[quote=B24]Man, that is just retarded.

However, I look at my area, and how many branches they think they will put up, and I laugh.  Let's just say I live in one of the smallest states in the country, and they are projecting a range of 500-1000 additional branches.  We currently have like 75 in our state, and they can't add them as fast as they are dropping.  Even worse, we only have 75 in our state, and there are soon going to be 4 in my little town, with zero in the next 3 towns in any direction.  Now, there is PLENTY of business, because we are not bound by borders (most of my clients don't live in my zip code), but it just looks ridiculous to people when we have 4 fukcing office within stones throw of each other, each with ONE advisor.  People think we are nuts.

[/quote]

I would agree. IMO, one of the many problems Edward Jones has is this absurd logic that everyone wants and needs a financial advisor. The reality is the vast majority of people don't even meet the basics of needing the help of a financial advisor:

1.) having the money and/or time to meet long-term financial goals (minimum target -- $200,000);

2.) wanting to take advice and wanting to work with a financial advisor (not to mention working with only one financial advisor -- me);

3.) having the correct temperament or willing to be educated;

4.) willingness to give referrals.

A client has to have ALL FOUR, IMO. If I and the staff did not have a good feel for them, we didn't do business with them.

In my decade-plus experience, I would say 10% of the population had or had the potential for the appropriate mix of assets, right investment personality and willingness to give referrals. So the typical FA is fighting with the entire investment community (banks, brokerages, independents, insurance companies, etc.) over that small group and you have to figure some of those people will have an FA already/are not worth the trouble.

Edward Jones' problem is that it brainwashes its sales force into thinking it can be all things to all people -- which, IMO, is a very dangerous road to follow. My came to my senses early and realized that is not the right way to build a business because the firm didn't believe much in quality control. Jones doesn't want to face the reality that some people need to be at a bank and some people need to be at an online brokerage -- the firm's logic is to take everyone in that walks through the door.

When I hear the typical EJ financial advisor regurgitate St. Louis' marketing research numbers about how much "investible assets" are in a ZIP code, I laugh because it's so terribly out of context. Keep in mind, those people tracking those numbers in St. Louis are generally home office people who have never worked in the field as a financial advisor and don't take into context what I mentioned.

They also don't take into account a lot of those "investible asset" numbers include a company's retirement plan balances, banking deposits and some other institutional money that may never change hands. And getting a hard copy of those numbers can be another cloak-and-dagger tactic. Like a lot of things Edward Jones does, it's misleading.

I think I have to disagree with what some of you are saying.  You have to look at this from a personal FA perspective, as well as a business perspective.  IN my area, despite it being a small community, there is a lot of wealth.  There is FAR more wealth than one FA could EVER manage.  There is enough wealth in this area for a lot more Jones FA's.  Now, from a selfish perspective, naturally I want it all for me.  But lets look at this a little mroe realistically:

-Once established, the average FA is going to pick up 1 to 3 new "real" clients per month, at most (real clietns defined as someone with real money, not the 35 year old with a $100 DCA plan).  So that translates into 12-36 real new clients per year.  The real number is probably more like 10-15.  Let's say that equates to $8mm per year in new assets.  IN my zipcode, which has 5,500 housholds, there is $2.5B in total net investable assets.  Now, I know those reports don't represent the actual number for dollars up for grabs, but it is directional and relational (i.e. can be used to compare different areas of wealth).

Now, my COUNTY, which has 100,000 HH, has $33B in NIA.  Since there are several very large employers in my area, my clients live all over the county.  Maybe 10-15% of my clients actually live within my zipcode.  And in reality, all I need is 100-150 "real" clients to have a kick-a$$ business.  I can have another 400 "B" and "C" clients if I want, but 100 real clients would make my career.  So do you REALLY think it matters if a few other FA's go after a few hundred of those 100,000 households?  And let's not forget, we also will have some clients outside that area as well (family, friends, referrals, etc.).  So let's say over the course of my career, I need 75 clients within my county, and 25 are outside the county.  The neighborhood doesn't seem so small anymore.

Trust me, I am not defending Jones, but what if the "ONE" guy in my town decided to stop prospecting at $30mm in AUM and does maybe 250K in production.  So from then on, we shouldn't allow ANYONE else into the area?  Seriously.  Think about it.  There is a life-cycle to every FA.  I agree, it is tough when you put a bunch of newbies into an area all at the same time, as they are all starting the same lifecycle.  But from a business perspective, it's just plain silly to limit your business if it's not necessary.

[quote=Najee]

I would agree. IMO, one of the many problems Edward Jones has is this absurd logic that everyone wants and needs a financial advisor. The reality is the vast majority of people don't even meet the basics of needing the help of a financial advisor:

1.) having the money and/or time to meet long-term financial goals (minimum target -- $200,000);

2.) wanting to take advice and wanting to work with a financial advisor (not to mention working with only one financial advisor -- me);

3.) having the correct temperament or willing to be educated;

4.) willingness to give referrals.

A client has to have ALL FOUR, IMO. If I and the staff did not have a good feel for them, we didn't do business with them.

In my decade-plus experience, I would say 10% of the population had or had the potential for the appropriate mix of assets, right investment personality and willingness to give referrals. When I hear the typical EJ financial advisor regurgitate St. Louis' marketing research numbers about how much "investible assets" are in a ZIP code, I laugh because it's so terribly out of context. Keep in mind, those people tracking those numbers in St. Louis are generally home office people who have never worked in the field as a financial advisor and don't take into context what I mentioned.

[/quote]

Najee, first, I like the four basic qualifications you have for a someone who needs financial advisor. Most the time, we just think of one qualification, $. You're ahead of the game.

Second, you are right on regarding the EJ market research on investible assets. At one growth meeting I attended with a St Lous H.O. guy in charge of the research, he gave us the definition of what one office should have. I think it was 5000 people per office or something and some kind of asset number in the community.

So I asked how they arrived at that number. How did they determine one office should have 5000 households in its sales area?  He looked puzzled and said it was more a rule of thumb.

So I asked again, on what basis was it derived? Specifically, have you ever found there were too many offices in one area? He said there were no known cases -ever-  where Jones had too many offices in a local and where that affected the production of the offices.

I quit asking questions because I could see it was a waste of time. The point it the whole thing was cloaked in these numbers to give it an air of scientific validity, but there was in fact no known science to the process.

It's 5000 Households and 750,000,000 in assets, or 500,000,000 for a small rural community.  I think that look at it from a potential market-share perspective.  Most of the areas we are in we have very small market share.  I think the numbers above would equate to 3% market share , which would be a mature Jones market.  We have very vibrant Jones offices in my region that are well below 1% market share.  But again, we might have 0.50% market share in a zipcode, and the only office in the zipcode might have 50mm aum, but 3/4 of his assets are outside the zipcode. 

[quote=Najee]

I would agree. IMO, one of the many problems Edward Jones has is this absurd logic that everyone wants and needs a financial advisor. The reality is the vast majority of people don't even meet the basics of needing the help of a financial advisor:

If you've been with Jones 10 years, you would have heard the Company line, "We only serve the individual investor."  Multiple examples of EDJ providing direction on who to follow up with and who not, come to mind.

1.) having the money and/or time to meet long-term financial goals (minimum target -- $200,000);

2.) wanting to take advice and wanting to work with a financial advisor (not to mention working with only one financial advisor -- me);

3.) having the correct temperament or willing to be educated;

4.) willingness to give referrals.

A client has to have ALL FOUR, IMO. If I and the staff did not have a good feel for them, we didn't do business with them.

In my decade-plus experience, I would say 10% of the population had or had the potential for the appropriate mix of assets, right investment personality and willingness to give referrals. So the typical FA is fighting with the entire investment community (banks, brokerages, independents, insurance companies, etc.) over that small group and you have to figure some of those people will have an FA already/are not worth the trouble.

Edward Jones' problem is that it brainwashes its sales force into thinking it can be all things to all people -- which, IMO, is a very dangerous road to follow. My came to my senses early and realized that is not the right way to build a business because the firm didn't believe much in quality control. Jones doesn't want to face the reality that some people need to be at a bank and some people need to be at an online brokerage -- the firm's logic is to take everyone in that walks through the door.

When I hear the typical EJ financial advisor regurgitate St. Louis' marketing research numbers about how much "investible assets" are in a ZIP code, I laugh because it's so terribly out of context. Keep in mind, those people tracking those numbers in St. Louis are generally home office people who have never worked in the field as a financial advisor and don't take into context what I mentioned.

They also don't take into account a lot of those "investible asset" numbers include a company's retirement plan balances, banking deposits and some other institutional money that may never change hands. And getting a hard copy of those numbers can be another cloak-and-dagger tactic. Like a lot of things Edward Jones does, it's misleading.

If you really worked for EDJ 10 years and haven't figured out how to Jonelink Search your zip code's NLIA then you again are a moron. 

I can't decide if you're a piker or legit.  Somewhere else you posted that $25M would rank you in the 5500 range.  I'm in the 4000 range with the firm and just short of $500M.  I called a buddy who has $26M and he is 6500 in the firm.  You sound like someone who quit a long time ago and is grinding an axe with outdated numbers and misinformation.  Really kinda sad...

[/quote]

Incredible Hulk,

It's interesting that like Edward Jones, you seem to have no problem thinking that personal attacks and intimidation is part of the culture of the real world as it is with the firm. If you really want to know, I left the cult two months ago.

First of all, I did know how to look through JonesLink and find its information on Net Liquid Investible Assets -- what you don't seem to understand is I want the methodology information on how that number is determined. More transparency, if you will. Also, what the home office is cloak-and-dagger on is giving that information to new financial advisor candidates -- Marketing Research basically calls prospective hires and give them a number and when generally pressed it gives vague answers.

For instance, in my old region a ZIP code was identified as having several billion of investible assets and the person from St. Louis (who visited our region for a strategic planning meeting) was determined this was the ideal place to put an office. The problem was the ZIP code literally had no building to open an office, save a closed-down gasoline station. There were three manufacturing plants in the area and he continued to debate this was an ideal place for an office. Moreover, he refused to take this location of the grid for a potential office. I and several FAs in my county called the home office to persuade that department finally to take it off the grid.

As far as legitimacy, I said that in 2003 my office had $24 million AUM and it placed in the top 2500 of the firm -- that was in reference to the size of the typical Edward Jones branch. You seem to want to omit that was in reference to where I refuted another person's claim that half the firm's offices today had at least $90 million AUM. I produced a 2006 Registered Rep interview with Jim Weddle where he said the typical Jones office then was $44 million AUM, and it's fair to say since the market downturn of 2008 that typical AUM is less than that.

http://registeredrep.com/mag/finance_keeping_joneses/

Unless you know want to start calling your fearless leader a liar.

You really need to learn how to read better instead of trying to be some uninformed cyber bully. But then again, that sounds like a typical Jonesbot.

Najee, you're just wrong.  $23mm would NOT have placed you at 2500 in the firm.  That's just plain wrong.  Not even close.  In 2003 we had over 9000 FA's, and the AVERAGE office had $33mm AUM.  I have the financials in front of me.  So you would have been more like #6500.

[quote=B24]

Najee, you're just wrong.  $23mm would NOT have placed you at 2500 in the firm.  That's just plain wrong.  Not even close.  In 2003 we had over 9000 FA's, and the AVERAGE office had $33mm AUM.  I have the financials in front of me.  So you would have been more like #6500.

[/quote]

Did you not just read what Incredible Hulk just said:

[quote=Incredible Hulk] I called a buddy who has $26M and he is 6500 in the firm.[/quote]

That is TODAY -- in 2010. So evidently, a $24 million office (the actual number, but I'm not quibbling) in 2003 was ranked much higher than that. So you're wrong.

I remember that because that was posted on my office's VBFT when I was working in the home office before I went back out in the field in 2003. I have a copy of that myself, so I'll check that again. I also remember that because when I came out in the field several area FAs were upset that "I had taken over such a big office."

This was the early part of 2003 -- so keep in mind, this was before the market uptick so by the end of the year it was closer to $30 million AUM before accounting for the clients I brought in. After taking into account the assets I brought in, the total AUM at the end of the year was $34 million. I really doubt I was in the lower third of the firm in December 2003 with an office that size -- when most of my old region had offices smaller than that.

And keep in mind, the "average" and the "office ranking" are two different things. I can take a $200 AUM office and a $10 AUM office and have an office average of $105 AUM between the two. Not to mention Edward Jones has shown to be very inconsistent and at times contradictory when it comes to numbers. For instance, in 2006 Jim Weddle is saying the typical FA has an office with $44 million AUM:

http://registeredrep.com/mag/finance_keeping_joneses/

And then Registered Rep's 2009 report card states the Jones FAs surveyed claim to have $58.6 million AUM:

http://www.stockbrokerfraudblog.com/2009/12/edward_jones_and_merrill_lynch.html

So in essence, are we supposed to believe the average Edward Jones FA's AUM grew by $14.6 million during through essentially the worst market since the Great Depression? Or is that a little misleading, since not all 10,000-plus FAs were surveyed (not to mention how some people just love to embellish their AUM just a bit)? Gotcha. 

Certainly, the average Jones FA does not have $364,258 in average production -- especially since the firm's FA revenue per day as of July was in the neighborhood of a whopping $637 (as told to me by another Jones FA today, who has more than $130 million AUM). IMO, some Jones FAs and the home office are just a little deluded and out of touch with what is the typical production and AUM for offices -- hence, the continual statements from Jim Meddle that "there are too many FAs out there just wanting to do the bare minimum" and the new culling program that went into effect Wednesday (the start of the September selling month).

If that ranking I stated about my office in 2003 is wrong, it's not by intent. Like I said, I'll check it. But then again, this is Edward Jones -- where you consistently get conflicting numbers and information. We both may be right and wrong at the same time.

[quote=B24]I think I have to disagree with what some of you are saying.  You have to look at this from a personal FA perspective, as well as a business perspective.  IN my area, despite it being a small community, there is a lot of wealth.  There is FAR more wealth than one FA could EVER manage.  There is enough wealth in this area for a lot more Jones FA's.  Now, from a selfish perspective, naturally I want it all for me.  But lets look at this a little mroe realistically:[/quote]

My point is more of the methodology and implied assumption from Market Research that the bulk of these assets are actually potential clients and are likely to do business in that regard, when in reality most of that money will never come to Edward Jones. It's quoting that "There are 100,000 households and several billions of dollars in an area" logic that has helped lead to the oversaturation of Edward Jones offices, IMO.

The home office loves regurgitating those numbers to the Jonesbots and those too green to process them, but in reality they are little more than Metropolitan Statistical Area-type numbers for a specific ZIP code. It's misleading to post that as a possibility and not fully disclose that particularly to new financial advisor candidates, who are making important career decisions on such information.

More accurate market research would collect information on people in the area who have submitted information saying that they are looking for financial advisors and have a certain amount of money to invest -- THAT'S real market reseach. I'm not even going to get into the fact that Edward Jones does no lead generation whatsoever, so people have to wander around to their own devices.

[quote=Incredible Hulk]If you've been with Jones 10 years, you would have heard the Company line, "We only serve the individual investor."  Multiple examples of EDJ providing direction on who to follow up with and who not, come to mind.[/quote]

It must be why the average assets per household for Edward Jones clients is so much lower than it is compared to other brokerage houses.

http://registeredrep.com/mag/finance_keeping_joneses/

In 2006, Jim Weddle said the typical client has $106,415 invested through Jones. Factor in the market downturn in 2008, you have to figure that number is somewhere around $90,000 -- not that far from what the typical person has at a discount brokerage.

I have to disagree on Edward Jones' quality control, or lack thereof. If you call "accept anyone who fogs a mirror" -- which was taught in my training classes -- quality control. I can count the number of offices I went into over the years where one-third of the book was "Red" clients who had not been into the office in years and in some cases there were no notes or information on clients' files. The firm has way too many small accounts with people who don't want or need a financial advisor.

In reality, the firm does what is in the best interest of the firm, which is why the firm's investment philosphy is what it is.