Good stuff, thank you for sharing. 

Can you address the brand issue in more detail? 

What aspect of the branding?

Those are the advantages of all captive firms. I will agree, though, that Jones does a pretty decent job of taking care of all the backoffice stuff pretty efficiently for the advisors.

What value do you think the branding presents?  Have many people snubbed their nose to your brand?  Has it taken more time to explain who you are and where the money is?  Did prospects warm up to the EDJ brand much quicker than yours?

The value of the brand at EJ is that it helps bring in clients. As I mentioned, clients may "walk in" or call in, after hearing that EJ has a good reputation. Also, I include under branding the possiblity of clients coming to you because they are moving to your area and are from another EJ office. Finally, there is the credibility in the clients' eye that comes with being with a major firm.

Have people snubbed their nose to my brand? No, not really. But I am with LPL, and I do not consider LPL to have much of a brand. When people research LPL, they see it is a credible company, and I find it as perhaps a slight negative over a wirehouse or EJ. When you get clients at LPL, they are coming with you almost 100% - not with the brand. You may say they are coming with you in spite of the brand, as there is almost none.

But an important point is the LPL brand is certainly not going to draw someone in for the first time. It is not a business builder in the way the Jones brand is.

B24, do you have any second thoughts on having left Jones, having been out as an RIA for a while?

Getting Started in the Business:

At Jones, they invest about $150k in training and salary to help a new FA get started.

The policy now is to try to give new FAs a book of about $10 million. The chance, with the current attrition rate, of getting an office is there as well.

If we estimate the value of $10m in assets based on what it would cost to purchase a book that size as an Independent, it would be in the $100k range.

Therefore, EJ is putting about 250k into a new FA to get them started. Not a bad deal.

You could even say, given the level of investment, that performance monitoring and such is a fair tradeoff.

What new policy to give FA's a book of 10 million? I've never heard anything like that.

I don't think it's official or in writing but I have heard it is the goal. Also, with the high turnover there is likely no shortage of open offices.

[quote=American Flag]

B24, do you have any second thoughts on having left Jones, having been out as an RIA for a while?

[/quote]

Yeah, I think Jones helps with SOME clients. I definitely picked up a few here and there that walked in/called in because "their mother had Edward Jones, their sister had Edward Jones", etc. But it was all mostly word of mouth from existing clients - and I found mostly from other parts of the country. I found very little (if any) came from national advertising. There was almost always a human element.

However, I have found that I have picked up more large, quality clients as an RIA. For some reason, CPA's, attorneys, and many individuals perceive an RIA/indy advisor as more "neutral" or independent - as in being independent from the company message (read: "product pushing").

I also have far more freedom to market as a see fit, rather than the Jones marketing "bubble".

Bottom line, Jones has some advantages (or any wire I guess), but I have found many more advantages as an independent RIA.

[quote=American Flag]

Getting Started in the Business:

At Jones, they invest about $150k in training and salary to help a new FA get started.

The policy now is to try to give new FAs a book of about $10 million. The chance, with the current attrition rate, of getting an office is there as well.

If we estimate the value of $10m in assets based on what it would cost to purchase a book that size as an Independent, it would be in the $100k range.

Therefore, EJ is putting about 250k into a new FA to get them started. Not a bad deal.

You could even say, given the level of investment, that performance monitoring and such is a fair tradeoff.

[/quote]

Yes and no. I don't think the true "investment" is nearly that large. First off, those are Jones' assets, so they are just taking them from one FA and giving them to another, so it's not an investment. Second, although they invest considerably getting an FA started, the 150K (if that's really the number) is after a few years, including office costs, BOA costs, etc. And by that time, if the FA fails, they keep the assets and move them to another FA, thus keeping the production going in perpetuity. So although from a pure accounting perspective, you might be right, but from a lifetime ROI, I bet it's usually positive for Jones.

That 150k is a static number mostly derived from their overheard costs. Not true training costs. Those are much lower. Those flights, hotel rooms, fancy buildings, food, and general partners don’t go uncounted in that $150k number. Jones primary sales training method, door knocking, is the same formula it has been for decades.

Here is what I see as the value of EDJ.

You can replaces #1 if you went to Raymond James or Wells Fargo - and probably even #3 to some degree.

I understand what you are saying about the 150k number, however, they do make an investment in the FA. This includes salary, training costs, and financing the business while it operates at a loss for the first several years. You won't get that from an Independent.

Regarding the assets given to a new FA, true they are Jones assets. But they still are given to the new FA to work, which is a boon for a new broker.

As an Independent, and former Jones FA, I am trying to balance out some of the criticism of Jones with the advantages. I am seeing these advantages with the benefit of hindsight. Those who are considering going independent should know both sides of the story.

I understand what you are saying about the 150k number, however, they do make an investment in the FA. This includes salary, training costs, and financing the business while it operates at a loss for the first several years. You won't get that from an Independent.

Regarding the assets given to a new FA, true they are Jones assets. But they still are given to the new FA to work, which is a boon for a new broker.

As an Independent, and former Jones FA, I am trying to balance out some of the criticism of Jones with the advantages. I am seeing these advantages with the benefit of hindsight. Those who are considering going independent should know both sides of the story.

@BULLY60: Don't know where you get the 65% number, but when you include the 40% payout, the milestone bonuses, the first year's salary, div trips (if you win one), and the subsidized health insurance you get a lot more than 40% payout. During your first three years you are given plenty of time to build your business with pretty low expectations. I took over two offices and in both cases I had A,B, and C clients. I kept most in the first office and all in the second (non-compete). So, your facts are skewed. As for being told what to do, I have yet to have a branch manager call me one time and tell me how to run my business. Compliance actually is on our side. Am I drinking the Kool Aide? No. I'm just telling the truth. Running down Jones to justify going independent is foolish because they are two seperate business concepts. If it makes you feel better to put EJ down to justify your current situation, that just tells me your current situation isn't so hot. But don't worry, Jones would take you back unless you really screwed them. Is going independent a good idea? Maybe for some. Maybe not for others. Either way, EJ is a great place to get your feet and who knows? you might actually like the culture and stick around for a while.

I think my wife said it best:

"You were constantly frustrated at Jones, which has now been replaced by the stress of going indie.  The stress will diminish where the frustation at Jones only grew.  You are already a much happier person and spouse."

I'm in my first six months as an Indie after more than a decade at Jones and couldn't be happier!

Hi - I know this is an old thread, so I was curious whether any of this still holds true?