EDJ: Selling UK Operations
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5000 offices in the Uk and 2500 in Canada was the long term vision we were told, 2 years ago at my last regional. We always knew we (Canada) were losing money but kept being reassured that we were in the long term growth plans. “We are a partnership, we make our own plans, we don’t have the same pressures as a publicly traded company”. I don’t know how growth and profit is going to be any easier moving forward as those who were thinking about leaving but didn’t because of the markets will have a major incentive now, especially when Raymond James dangles a bit fat cheque.
Spiff tells us constantly how the GP’s know what they are doing and they’ll keep the non-US operations until they deem it necessary to sell.
Guess what Sir Spiffster- It became necessary for them to sell the UK and it will more than likely be necessary for them to get rid of another non-performing asset...Canada. Then the next step will be to change the model to DECREASE expenses and INCREASE revenue in the US. You know what that means...less correspondence on these forums (I notice that Spiff only responds during the business day) and more production. And don't be suprised if they come up with a new compensation plan to INCENT the Vets to produce more and those that are on the bottome rungs of the ladder (who are sitting back on their laurels)will either be let go or forced to leave because their comp will drop or both. Jones will have to adopt the more cut-throat techniques of the wires to survive. It won't be fun anymore to sing kumbayah around the fireplace with a shop on every corner the competitiion (in the future) between reps will be fierce. And all the great hand-holding that the new reps get from vets will have to be done by home office because the FA's will finally see the light...that they have been taken advantage of for far too long without any benefit other than keeping their jobs. Of course there is always the greatest incentive for non-producers to stay the coveted LP. Sooth...the further I am removed from Jones (now in my fourth year of independence) the more I realize what a joke it was for me to remain as long as I did. What was I thinking...if it walks, talks, and smells, it is what it is. So Sir Spifster...a great place to learn the biz, and as soon as it's possible, get out of dodge to save your career and reputation.Why is my career and reputation in jeapordy? See, I came to the office this morning thinking I was doing just fine and now I find out I have to go look at monster.com.
I can only imagine the warm fuzzy feeling you got, foot, when you heard that Jones was selling the UK division. You probably had to change your panties, you got so excited. I do post during business hours, because that's when I think about business. See, I have this thing that you might want to consider getting for yourself...a life. When I walk out of my office on Friday afternoon, I try not to think about the office, EDJ, RR, or anything else work related. You, however, evidently don't have anything better to do on a Sunday afternoon that to come on here and pontificate about the future of EDJ. As to your pontifications - who knows what will happen at Jones in the future. Jones will be saving $5 million a month when the UK division is gone. That will certainly make an impact on the budget. Canada is a bigger question mark today than it was last week, that's for sure. Jones is going to have to do some hand holding up there in an effort to retain as many good folks as possible. They're making a point to make sure we are told that as of right now, the business model will work in Canada better than in the UK, so they're committed to growing there. I hope that's true. Time will tell.[quote=Soothsayer]The funniest part about all of this is that Juck Phones questioned EJ’s money losing international operations less than 60 days ago in these forums. Spiffy said that Jones was committed to those two countries, “no matter what.” He got the usual pile-on from the Jones’ zealot including Volt. Phones gets it. Money down that hole has a negative impact on the company during an industry wide downturn when there is only so much capital to go around.
I just wish some of the rest of you could step outside your pathetic little Jones world for a minute to see what a truly low-rent, third-class, control the message, pseudo-cult, quasi-multi-level-marketing, run by a bunch of greedy former pitchman goons your "firm" truy is. Phones asked a legitimate question--the kind I used to ask when I was there. Can you imagine the reaction in the room when the question at the summer regional was, "Any idea how much longer we're going to shovel money into the black holes known as Canada and the UK?" You were a pariah for even thinking such a thought, let alone wondering it out loud. John knew best. Doug knew best. Not for you to worry about. Now, go back to your office and sell some American Funds 3-pack and a 30-year muni. Pathetic. It was crap all along, and many of us knew it 10 years ago. [/quote] Sooth, you might try de-caffeinated once in a while. This whole thread is sort of funny. We are talking about two tiny operations that are a fraction of our revenue and a drag on our profits. Personally, I could care less what happens to the UK or Canada. I DO care what happens to the associates, as I don't like employees at ANY firm to be forced through a transition. It has to be tough. But I think they will all land on their feet with the new firm(s). As far as Canada, regardless of what Jones has to say publicly, I am sure they have been going through the same DD process for several years, just like in the UK. Most likely, UK was tough to unload because of our model and the money-losing nature of the operation (although I think the assets are valuable, Jones simply had too much overhead). So the decision to unload the UK was probably made years ago. I assume the same decision has been made already in Canada (to either keep or sell).Foot, me thinks you is right. Weddle has not even tried to HIDE the fact that he wants more production of the seg 2/3/4 producers (or basically those people out more than 3-5 years that are just treading water). And I don’t blame him for it. I look around our region and it is pathetic how poor the production is. We have handfuls of guys out over 10 years that can barely hit 10K months. I mean, seriously. That’s awful. When you contrast that with the guys doing 30-40K/month out the same amount of time (from scratch, mind you), there is no reason Jones should not expect at least in the low 20’s. Personally (and I know these people), I think most of the underperformers have just been coasting on trails and maturing bonds, and work SO LITTLE it’s pathetic. I’m not saying you need to be working 50 hour weeks and opening 10 accounts a month after a decade. But it’s not too much to ask that you put in SOME effort. After 10 years, you must have at LEAST 5-8K in trails per month, and a few grand worth of recurring deposits, maturing bonds, etc., so most of the production is jsut happening on its own. If you simply picked up the phone and proactively called 100 clients per month, I guarantee you would uncover some new assets. I KNOW these guys are just lazy sh!ts. And they are just taking up shelf space where we could put productive people.
Talk to a friend of mine today who is at Jones still… 159 account ytd, end of year production will be around $525K. But he dialed his ass off the first 3 years.
But then when i asked him what his household average was "$156K"... That is what I hate about Jones.. too many small accounts.[quote=Squash1]Talk to a friend of mine today who is at Jones still… 159 account ytd, end of year production will be around $525K. But he dialed his ass off the first 3 years.
But then when i asked him what his household average was "$156K"... That is what I hate about Jones.. too many small accounts. [/quote] Very true. Trouble is, he probably scored a lot of gross from opening tons of small accounts, so in some cases, the 80/20 principle doesn't work at Jones. If he stopped opening small accounts, and got rid of his small accounts, he may kill his production. However, if he is opening that many accounts, and has a 150K average HH, chances are he has quite a few large accounts. He should convert his best clients to advisory fees and get rid of his small accounts, then stop taking small accounts. He would most likley have an average HH of around 350K if he did that. Of course, I could be way off.[quote=Squash1]Talk to a friend of mine today who is at Jones still… 159 account ytd, end of year production will be around $525K. But he dialed his ass off the first 3 years.
But then when i asked him what his household average was "$156K"... That is what I hate about Jones.. too many small accounts. [/quote] You must have meant that is what you hate about your friend. He or she is the one that opened "too many small accounts". If you are trying to convince us that Jones REQUIRED him/her to open small accounts you are either a bigger idiot than I suspected or you give everyone here far too much credit for being stupid. I know this post is guns blazing but this same old tired crap just gets old. You don't need a reason to hate Jones. Spare yourself the embarrassment of making up a lame one.[quote=Squash1]Talk to a friend of mine today who is at Jones still… 159 account ytd, end of year production will be around $525K. But he dialed his ass off the first 3 years.
But then when i asked him what his household average was "$156K"... That is what I hate about Jones.. too many small accounts. [/quote] You say he opened 159 accounts ytd like it's a bad thing. Those 159 accounts represent probably 40-50 households that used to be with another advisor. So, that's 40-50 additional opportunities for life insurance reviews, rollovers, referrals, etc. If each of those households makes just one $5000 IRA contribution, that's an extra $250K ($7500 -$10K gross) over the course of a year. Not a bad little pop to your T12. At some point your friend can decide that he works with enough people and start doing GKN plans. He can give away $5 MM of his pain in the butt clients or those small accounts that don't benefit him anymore and you'll see that $156K jump up quickly. And it won't kill his production. It will more than likely go up. Jones is full of vets who have been out for 10+ years who are whittling their books down just like your friend will someday.Spiff, It’s just two different ways of doing business. It’s not right or wrong. You’re both right. I think the point is that msot independant advisors can afford to take on fewer, larger clients, because they don’t need the pop this month to meet some arbitrary target. Yeah, it’s great to open 150 accounts in a year, but that takes a hell of a lot of effort. Personally, I would prefer working with fewer clients, and perfect my client service and investment processes so that MORE of my clients are “wowed” by their experience. If you open 150 accounts in one year (other than your first few years maybe), it is impossible to give every client in your book first class treatment. Based on the original comment, I am assuming this guy is out at least 5 or 6 years (or more). SO he probably has 750+ accounts (maybe 400 households?), and is adding new accounts at like one a day. So there is NO WAY he is giving service to everyone at that pace. Some people jsut don’t want to do the high-volume thing. But there are indies that still follow that model. I have wirehouse friends with thousands of accounts (maybe 1500 households). So it is not jsut Jones. There are Jones guys doing it the other way too. Guys like Jim McKenzie (350 housholds and $170mm AUM). But then there are the Wann Robinsons (1300/$275mm) and Jim Phillips (1400/$360mm) of the world. Would you want to be ONE GUY managing 1400 households?? Sure he makes a bundle of cash (nets over $1mm a year himself), but talk about workload.
I agree. Squash's comment was that he hates Jones because we open a lot of small accounts. The reality is that the size of the accounts and the number of households an advisor wants to handle is completely up to him. I'd love to have 100 clients with $1 mil in some sort of advisory account. Jim McKenzie's business model only works for him because he's been in the business since 1966. I'd bet if you back up and look at what kind of households he managed back in the 70's and 80's it wasn't 350. It was probably double or triple that.
I don't know that I'd want to try to manage 1500 households. Service is important to me and I assume it's important to most people. I don't want to be the guy in town with the reputation of being to big to take care of people.
The reality also is that in the Indy world you can have it both ways, and Jones’ limitations just don’t allow for that. The owner can work with the top 150 clients, and can hire registered reps to work with everyone else. As soon as Rep #2 gets 250 or so, they hire another person to take the bottom 100 and so on.
All the revenue goes to the owner’s rep #, he/she pays the RR about 30-40% of gross, and keeps the other 40-50% for himself.
The client is taken care of, the newer RR has an easier start in the business, and everyone is getting paid.
That's a helluva override! Are indies really charging their reps that much? I would think the payout would be more like 60-65% to the rep. Although you are just handing them a book.The reality also is that in the Indy world you can have it both ways, and Jones’ limitations just don’t allow for that. The owner can work with the top 150 clients, and can hire registered reps to work with everyone else. As soon as Rep #2 gets 250 or so, they hire another person to take the bottom 100 and so on.
All the revenue goes to the owner’s rep #, he/she pays the RR about 30-40% of gross, and keeps the other 40-50% for himself.
The client is taken care of, the newer RR has an easier start in the business, and everyone is getting paid.
Right–if you are a newbie, 30 or 40% on stuff handed to you beats 40% on pounding the pavement for every little morsel. If you have an exisiting book and therefore some options, 60-65% is more like it.
B24-Exactly, they are getting this business handed to them. No work required. The sad truth is that most often I see Indy firms bringing in Newbs with no real experience and getting this type of situation handed to them, and they have no appreciation for what went into it.
Also the 30-40% I refer to may not come in the form of commission, but a base salary, which often times makes it even sadder.
Amazing how someone adds a little fact to the discussion and everything goes silent. What happened to this thread?