EDJ Unveils Fee Based Platform
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I don't give a SH1T what your 5 year plan says. What I am talking about it is how MOST of the Vets and all of the training harped continuously that Fee based was of the Devil and A shares were much better for the client. Holier than thou and then some. If you never told this to a client then good for you. If you did and you go back to that same client and try to pitch them on Advisory I hope they call it what it is. I am not one of your major Jones bashers on this site and have applauded Weddle for bringing you guys out of the Dark Ages. I am glad you finally have an advisory program. Many of my friends still there are excited. However you should quit claiming we are mad that Jones get advisory. I am simply mad at the 2 yr rule. I am convinced though that based on the former position of Jones on A shares, that any client who subsequently is swapped into Advisory should not have to pay fees until at LEAST the Sales charge is fully covered. Otherwise Jones IS a screwing the client.[/quote] ALL of the training? Really. In my history with Jones I've either taught or attended 90% of the training programs out there. I don't EVER recall the "Training" saying anything like you are implying. Your mentor, your Visiting Vet, some GP somewhere probably did say that. However, the "training" never even dealt with it. With that said, I've know that there have been some staunch supporters of John Bachmann's viewpoint that fee based business is not good for the EDJ client. He saw the average EDJ clients as the buy American Funds A shares and forget about it. Buy a muni bond and forget about it. Take the income, but don't worry about anything else. Weddle obviously doesn't believe that way and the folks who sided with Bachmann on the issue are retiring, to be replaced by people who agree with Weddle. Thus Advisory Solutions. I want to ask you how you would handle a couple of clients of mine who would qualify for Advisory solutions, but in your opinion would get shafted if they moved. Both of them invested with me early in 2006. I put both clients in one fund family to hit the $100K breakpoint. One with LA, one with American. The American client is pretty happy. Had a decent 2007 still up a little on their investments despite the bear market. The LA client, not so much. He's down. Not a ton, but still two years with no results makes for an unhappy client. Neither of them are at a breakeven point with the fee on the Advisory Solutions platform. Both, I believe, would benefit from the extra diversification not only in fund families, but also in asset categories. Ever tried to buy a domestic small cap growth fund at American? So, what do I do with them? Do I show the platform to the LA guy, but not the American? Do I show it to neither one? Do I show it to both and let them decide? Do I wait another year to let the fees better align? What if the Advisory Solutions portfolio that I would have used outperforms their current portfolios in the next year? Woudn't they have lost out on some returns?[quote=Broker24]
And if you have actually seen our 5-year plan, it is explicitly stated that we rely too much on a single revenue stream. I think far more than MAKING more money for the firm, it is meant to diversify our revenue base. It’s as much a risk management tool as a profit driver. I think the “new guard” saw the light and knows that AMF and revenue sharing are too big a risk to the firm right now (it’s the equivalent of having 65% of your 401K in your company’s stock). They are simply doing what the “old guard” could not or would not do.
Spiffy-
If the client is your utmost concern, then fight for them. If you feel advisory is better for x,y, or z reasons, then take it to compliance. Get them to buy in ahead of time, you will get the result you want. It is only as difficult as you make it. Go back to my last response to you and use it (for clients). And tell the folks who can't sell what you are doing and why, and I would bet the farm it will all work out. Koombuyah! PS. And remember, soon you will be a true financial advisor rather than an AF rep. BTW. In my 10 years at Jones, LA and Putnam were consistent underperformers in the Jones stable of funds. I know Putnam is out now, and so is Uncle Milty. Any idea what ever happened to him?I want to know how newer guys at Jones, like myself, who were taught to "ask for the order" over the phone and begin relationships with transactions are now supposed to use financial assessment tools and advisory solutions to build our book. I truely believe in advisory solutions, but how the hell do I pay my bills by adding $112.50 to my month for a 100k ticket instead of the $3,000 I would get on an A share order. Then also have to listen to why my rolling average has jumped off a cliff.
Spiff,
Obsiously you'll have clients better off in advisory. I know you'll have no control to do this, but Jones should WAIVE the Advisory fee until the clien'ts upfront charge plus 12b's paid no longer exceed the equivalent amount which would have been paid if Advisory had been done from time of investment. This should be at a minimum or the client is being over charged. In your specific situation since you can't do that, you should discount the fee to the lowest you possibly can. PLEASE don't say how can't you afford to do this. You will still be getting a raise.In fact, since most A share buyers were promised never to pay another sales charge my opinion would be that as general rule A shares moved into Advisory should recieve the maximum discount.
A few days back someone posted it was ok to offer both fee based and commission based accounts–I agree. I left Jones about 16 months ago and most of the folks who came with me today still hold commission based accounts with CL A share funds, stocks and bonds. Most of my new clients are fee based only! I have told all the clients who came with me from Jones about fee based but I only had two folks agee to it. That is ok with me and them. Whatever is best for the client and they agree to!
You know, if this were ONLY about the fee, I’d agree 100% with you. It’s not, so I don’t.
Advisory Solutions will be a FUNDAMENTAL change in the way I do business. Therefore, for some clients who may or may not have invested with me just two years ago, a FUNDAMENTAL change in the way they pay me. I see my clients splitting themselves into two major groups. First, the group that wants me ONLY for my classic EDJ Investment Representative role. I show you how to manage your portfolio, but you're not interested anything else. For those people American Funds A shares or some other variant will be the way to go. For them, the classic commission model will be the best choice. If the only thing I've advising them on is what to buy and when to buy it, then they should either buy or stay in A shares. For them, EDJ won't have changed from 30 years ago. Second would be the group that wants me to be the EDJ Financial Advisor who plans their retirement, their education, manages their money (whether personally or through the CFAs w/ Advisory Solutions), etc. For them I will be spending the majority of our conversations talking less about investments, more about their life, goals, and plans. For them, the fee will be a bargain. I don't sell A shares based on the you'll never have to pay another sales charge again premise. It's flawed. It allows no room for error in the event of an Putnam-like implosion. Instead, I tell my clients that I do the best I can with the information I have at my fingertips right now. Two, three, four years down the road the landscape may change for any one of the funds I'm recommending today. At that point we have a few options. Hold, exchange, or switch. We will always talk about those three options. At the end of the day, it is their money and they need to know what options they have in dealing with it.[quote=GT Key]
I want to know how newer guys at Jones, like myself, who were taught to "ask for the order" over the phone and begin relationships with transactions are now supposed to use financial assessment tools and advisory solutions to build our book. I truely believe in advisory solutions, but how the hell do I pay my bills by adding $112.50 to my month for a 100k ticket instead of the $3,000 I would get on an A share order. Then also have to listen to why my rolling average has jumped off a cliff.
[/quote] There was a suggbox wire on June 9th that Weddle answered asking the same question. His response was "If you open so many that it adversely affects your on-track performance, call me and I'll personally override the tracking system." I thought that was an interesting quote.I think the point is, like anyone starting out, much of your new business will be transactional. Whether you are at Merrill or UBS or Wachovia or EDJ, starting from scratch, you have to figure out how to do business first. The only real way to do that is to learn how to sell stocks, bonds and mutual funds.
[quote=Spaceman Spiff][quote=GT Key]
I want to know how newer guys at Jones, like myself, who were taught to "ask for the order" over the phone and begin relationships with transactions are now supposed to use financial assessment tools and advisory solutions to build our book. I truely believe in advisory solutions, but how the hell do I pay my bills by adding $112.50 to my month for a 100k ticket instead of the $3,000 I would get on an A share order. Then also have to listen to why my rolling average has jumped off a cliff.
[/quote] There was a suggbox wire on June 9th that Weddle answered asking the same question. His response was "If you open so many that it adversely affects your on-track performance, call me and I'll personally override the tracking system." I thought that was an interesting quote. [/quote] Spiff, your responses are starting to sound like what many Indy's were saying on this forum a year ago. You're starting to get it. The above response by Weddle is an indication Jones isn't really committed to this yet, and they don't even really want someone going all-out advisory.CIB-
I think Weddle's point was more "don't put the cart before the horse". This wasn't coming from a veteran advisor. Most guys starting out aren't opening $100K+ advisory accounts out of the gates. His statement was that if your biggest problem is that you're opening too many advisory accounts, they will certainly adjust for that. But ICE was right, as the platform develops, they will likely begin to adjust their goal structure (and possibly compensation) to allow for new FA's to open advisory accounts.That's how I took it too. I think Jones is absolutely committed to this. I've never seen a product launch that has had this much attention or taken this long to develop. I believe they wanted to make this thing as perfect as they possibly could so that it doesn't take 10 years to gather steam like MAP did.
I agree that they'll make some concessions (perhaps some kool aid flavored ones) for people who open a ton of these type of accounts as a new FA. They won't cut off their nose to spite their face.Now that the cult has had some time to readjust to the world of fee based accounts… give us an update. I haven’t dropped by for a few months but would love to hear your life is great, we are the best, we’ve always supported fee based if it was done the “right way” stories. It will give me something to read when I get back from vacation…
I don't have any stories to tell. Our minimum is $100k, and if someone brings that in, I've got to have the upfront pop.
So, no scoop here.Life is great at Jones.
We are the best. I've never told a client fee based biz is bad. John Bachmann and Doug Hill did for many years. Not in my office. The platform is really quite good. I can't imagine Jones ever becoming a fee only machine like some wirehouses would like to be, but we've finally waded in waist deep instead of just sticking a toe in like we were with MAP.Actually, you have Spiff confused with me. That was my production.You netted $1.42 last month didn’t you…
Yeah, I easily doubled that number. Wait, they haven’t taken insurance out of my check yet. Oh well…easy come, easy go.
My region has had it for about a month. I've got transfer papers on just over a mil, plus another $500k of client's that are moving some of their existing assets into it. And I haven't hit it as hard as I plan to in the next coming months. I'd like to have $6-7 MM in it before the end of the year.
They like it. Funny that to a person my clients who have moved have said that they listen to this guy on the radio who says fee based is the way to go. They are thrilled that Jones has taken this step. It's also reopened some conversations with some prospects that told me no a few years ago because they didn't want to pay me commissions. Now that it's a fee based conversation they'll listen again.