Yeah, his real name is Justgothiredasacaddy!

[quote=Whomitmayconcer] Yeah, his real name is Justgothiredasacaddy!

[/quote]



That’s ridiculous!



Why would anyone go to Jones if they could get hired on as a caddy?

he is a bit. he is accomplishing precisely what he/she/it hoped.

[quote=skolbrother] he is a bit. he is accomplishing precisely what he/

she/it hoped.[/quote]



True, but it is fun to watch.

[quote=jusboughtacaddy]

i recently heard of a broker losing his son in a drunk driving accident.  jim weddle, burr, fess, and some of the other lps were at the funeral. is the head of lpl going to come to your kids funeral?  my eyes are wide open... im surounded by very successful people in my region.  if there was a better mouse trap out there, these people would have left a long time ago. 

by the way, im runing the call session... 

[/quote]

If the Broker died, old Jim would be there to get the keys to the office from the spouse and then tell her/him:  "Sorry for your loss and haul ass...I've got a GP's kid to put in this office."

Jusboughtacaddy is Incredble Hulk!!

[quote=bspears]I could care less if the boss of LPL is at the funeral.  A crook in the big office is still a crook at the funeral.  Hell if I was making a huge amount of cash off the backs of my employees, I might find the time (out of my nap time) to go to a funeral or two...just to make you feel good about making more calls for me.  Did you ever think it was a marketing tool...and it worked. Your here talking about...my managing partner went to this nobodys funeral. Isn't he great...we have a great firm now.[/quote]

 I'm gonna have to step up to the plate against one of my favorite posts on this site.  I'll not believe for a minute that Big Jim is a crook.  I'm goddamn starvin proof that the Jones model is hard to make a living on.  Attending a funeral, that's very respectable, under any circumstances.  Ease up, even i'll suck em off about this one.

 Gulp,

 My damn feet hurt

 ED

[quote=uwec86][quote=jusboughtacaddy]

i recently heard of a broker losing his son in a drunk driving accident.  jim weddle, burr, fess, and some of the other lps were at the funeral. is the head of lpl going to come to your kids funeral?  my eyes are wide open... im surounded by very successful people in my region.  if there was a better mouse trap out there, these people would have left a long time ago. 

by the way, im runing the call session... 

[/quote]

If the Broker died, old Jim would be there to get the keys to the office from the spouse and then tell her/him:  "Sorry for your loss and haul ass...I've got a GP's kid to put in this office."

[/quote]

 Nope, don't agree with this one either. 

 Gulp,

 My damn feet hurt,

 ED

I hear the same thing from every Jones broker I have come across:

LOW FEES, A SHARES, LOW EXPENSE INVESTMENTS.

Here's my reply to them:

#1:  C-shares will be cheaper for the client up until part way through the 6th year.  After that, A-shares are cheaper.  But what client holds an investment for 7 years or longer?  Not many.  They usually end up moving investments to meet their changing needs or the changing markets.  And besides, since Jones ONLY sells A-shares, they are going to need to get paid again in a few years so they will switch investments before that 6-7th year anyway.

#2:  Why does Jones focus so much on investments with low expenses?  Answer this: which investment is better?  Inv. A which has very low expenses and nets 8% annually, or Inv. B which has very high expenses, but the nets 10% annually.  A Jones broker would choose Inv. A because of the low fees, but I (hopefully most others) would choose Inv. B not because of the expenses, but because of the net return the investment provides my client.  Why do Jones brokers stress over low expenses when they should be stressing over net return.

#3:  It seems Jones thinks low fees are the best thing since sliced bread.  LOW FEES, LOW FEES.  Blah Blah.  Don't we deserve to get get paid anymore?  I know competition drives prices down, but honestly, how far can we go.  And whats wrong with a few based business.  We should get paid for servicing a clients account, not just making a transaction.  Fee-based also gives advisors more of an incentive to service the account.  When the clients account appreciates, so does the advisors pay.  That sounds like a good correlation to me.  But the Jones broker will make a transaction and then be done with the client.  They got paid, thats what they wanted.   

I hope Jones brokers can pick up on some of this.  Ya think they will?

Did you get your opinion and facts about Jones ONLY from this site?  How many Jones brokers do you know?  Have you actually spoken with more than one to find out what we think and where we would like the firm to go?  My guess is 1)yes 2) maybe a couple 3) no. 

To your points:

#1 Your arguement is the same one that every fee based/C share proponent makes.  If we only worked with accounts that don't hit any significant ($100K+) breakpoints, you'd be right.  Using the $100K breakpoint numbers it takes less than 4 years at 10% for an A share to become cheaper for a buy and hold investor.  The NASD has a great tool for calculating mutual fund costs.  You should try it.  My opinion is, if you are selling mutual funds and you trade them like stocks you need to retake your series 7 again.  Funds are designed to be held for a long period of time.  Under $100K, B shares are appropriate for a buy and hold investor. 

You also need to do your homework on the client.  If they are going to completely change their lifestyle and therefore investments w/in 3 years I might look to C shares for the short term. 

2)  A good Jones broker would look at both expenses and returns.  I have no problem selling TEDIX with a 1.39% exp ratio BECAUSE of it's exceptional return.  Honestly I don't pay much attention to the expenses of a fund.  I look at the returns.  I was actually a little suprised when I started selling a lot of TEDIX and then noticed the expenses.  But I haven't stopped.  I'm just more aware. 

I'll use the expense arguement as a way to get a client in my doors.  If I can prove my process is better and less expensive than what they are currently doing, I've got a great shot at new biz.  I love to show how close I can come over time to the same expenses as Fidelity and give them personal service.

3) There is absolutely nothing wrong with a fee based biz in my opinion as long as the clients are paying a fair price for what they get.  I love to hear prospects tell me they have a fee based account but haven't heard from their broker in over a year.   Those are almost always slam dunk cases. 

I make the same arguement you do only in reverse.  Mr. Prospect, what incentive does your broker have to do anything more with you?  The market is going to grow your assets, not your broker.  He knows how much he's going to get paid this year whether he does any work for you or not.  BTW, how did you feel when you were paying your broker to lose you money 2000-2002?  Didn't that fee every year compound the problem?  Would you like me to show you how I can make it go away?

Have you seen the the service awards from JD Powers?  Do you think we got those by having the attitude "make a transaction and then be done with the client"?  If anything we contact our clients too often.  Service is stressed constantly at Jones.  The make a sale and forget about them is what people who run a fee based biz say about transaction based brokers to justify the fee they charge in their mind.

Spaceman Spiff:

Your definitely one of a kind then.  I know many EDJ brokers.  Actually one is a relative and who in this industry doesn't come into contact with people at different firms or know people at different firms. So thats that.

And about the breakpoints, yes, I forgot to take that into account and I know that mutual funds SHOULD be long-term investments.  But can you honestly tell me you don't have some clients that will move in that time frame, WITHOUT it being solicited or recommended.  I don't need to take the 7 again, I actually did quite well, maybe I'm just a realist and know that that goes on.

"I'll use the expense arguement as a way to get a client in my doors." ........And then what, you will sell them an investment with higher expenses.  Sounds kind of sleezy to me.

And when the market went down in 00-02, so did the advisor fees.

You have fun working FOR EDJ!!!

Spiffy,

I found out who you are.  You are the guy who was in my training class that filled vending machines for 5 years before joining Jones.  With your uneducated words of advice, you proceeded to counterdict yourself twice in one post by saying that a good Jones Porker would look at both expenses and returns but you would be screwing the client if you didn't hit 100,000 break point.  I call BS.

If this is true, when have you ever used Hart Cap Ap over your beloved GFA, when have you ever used a fund like columbia acorn intl to compliment your Cap World G&I, when have you ever used a mid or small to compliment the large cap of AM funds?  Have you ever used ING's Global Real Estate fund to add diversification? You have never done any of this because you admit that your focus is the breakpoint and your firm would hang you for not hitting the breakpoint.  I know this as I did this when I was at Jones and I had to answer FSPends all day long.  Never mind the fact that we might be adding diversification to the portfolio, Columbia doesn't pay us enough revenue sharing.  My clients are much happier having owned Columbia Acorn Intl over the last three years in a C share than having saved two percent on a breakpoint.  You kill me - I would have rather owned Cap Ap in a C share over GFA at NAV over the last 10 years even in my own acct.  Have I cherry picked examples? Yes but I would also pick George Forman over you in a backyard brawl. 

If that isn't enough you admit that you don't even research what you sell before you sell it.  You didn't know what the annual fee on Mutual Discovery was you didn't read the prospectus. Do you even know what portion of the fund is domestic vs intl or is it all about the return since Jones lits it in the Growth and Income section of their monthly focus list, you are probably selling it as a domestic fund.

Maybe you should quit listening to your Am Funds wholesaler and start doing some research of your own, but that would cut into your arts and crafts time. 

PS Wash Mut, Bond Fund of Amer, GFA, Cap World G&I and Small Cap world is not a well diversified portfolio

Serenity Now, Serenity Now

If this is true, when have you ever used Hart Cap Ap over your beloved GFA, when have you ever used a fund like columbia acorn intl to compliment your Cap World G&I, when have you ever used a mid or small to compliment the large cap of AM funds?  Have you ever used ING's Global Real Estate fund to add diversification? You have never done any of this because you admit that your focus is the breakpoint and your firm would hang you for not hitting the breakpoint.  I know this as I did this when I was at Jones and I had to answer FSPends all day long.  Never mind the fact that we might be adding diversification to the portfolio, Columbia doesn't pay us enough revenue sharing

To be fair,  a lot of this lack of diversification and emphasis on breakpoints has to do with the commission based model.  Unless you are a IAR who is doing fee based business, all B/D are making you use worksheets to figure out and document breakpoints.  If you scatter A share mutual funds all over the place you can expect to get a call from compliance.  The amount of B shares are limited and C shares also require documentation.

The handcuffs I had on when at Jones dropped away when I went Indy.   Maybe when the Jones model changes to fee based, as it seems to be doing, then Spiff will be better able to do asset allocation. 

Also.  To get over the A share delima and still get diversification why not look at a portfolio of closed end exchange traded funds?

You may be correct.  There might be a time or two when a client comes in and has a completely different situation than they did 3 years ago.  My job is to sit down with them at the very beginning of the relationship and based on what they tell me then, make recommendations to them.  If they tell me they're going to want to completely revamp their entire portfolio in three years, I would look at them a little differently.  In fact I had one of those recently.  Lady brought me $150K that she got when she sold a house.  She didn't know exactly when or even if she was going to buy another house, but since we didn't know for sure I bought C shares.  A year later she took the money and bought a house. 

When you try to make the arguement that people change their investments to meet their changing needs or changing markets, you're not talking about something that happens overnight.  Those kind of things happen over the course of years.  If the advisor does his job correctly there shouldn't be a wholesale change from one investing style to another.  You don't just wake up one morning and find that you need to move all of your clients out of Small Caps into Income.  You might make some small adjustments, but the asset allocation strategy remains relatively the same.  That's the beauty of asset allocation through our overly simplistic bar chart system.  It really doesn't matter what the market does or is doing.  It is what it is.  

Now, if I'm using Small Cap Growth Class A at Fund Co XYZ and I need to make a change to Total Return Bond Fund Class A, the beauty of A shares is that the clients don't pay a dime to make that move (taxes in a NQ account not withstanding).  Not so in your fee based account.  They're going to pay you 1%+/- to readjust their portfolio, whether you do or not.  Even if the market is going down, you still get paid.  Granted I do have to stay within Fund Co XYZ, but it's my job to find a company to start with that has good offerings in a lot of different styles.  Thus my use of Franklin Templeton.

But let's say I decided that I didn't want to stay in Fund Co XYZ, because Fund Co PDQ has a better Income fund with a higher yield.  I'm only going to move a small percentage of the overall portfolio to that new fund family.  Not make a wholesale change.  Let's say it's a $100K account.  I need to move 10% from Small Cap to Income and it's the only money we're going to move to a different fund company this year.  In a fee based example at 1% the client pays you $1000 that year.  With A shares he pays $350 for the $10K he moves.  Even if we did the same thing the next year he'd still be ahead.  As long as we make small changes when necessary the A share system will be cheaper.   

You won't find me on this board saying that fee based biz is evil.  I don't think it is.  I think it gets abused, just like you think A shares get abused. 

You are completely misjudging Jones brokers if you think we are slapping people into A shares and then forgetting about them.  ALL of the GOOD Jones brokers do a phenomenal job contacting our clients.  We call it Acceleration.  Jones even teaches us how to set the sytem up.  In fact I hear more stories from places like Amex, Morgan, or Merrill where the broker hasn't contacted the client in years than I do from Jones. 

I don't think there's a former Jones broker on this board who can honestly disagree with me.  As a whole we are VERY good at servicing our clients.  And we do it cheaper than your fee based platform.   

[quote=jones&out]

Spiffy,

I found out who you are.  You are the guy who was in my training class that filled vending machines for 5 years before joining Jones.  With your uneducated words of advice, you proceeded to counterdict yourself twice in one post by saying that a good Jones Porker would look at both expenses and returns but you would be screwing the client if you didn't hit 100,000 break point.  I call BS.

If this is true, when have you ever used Hart Cap Ap over your beloved GFA, when have you ever used a fund like columbia acorn intl to compliment your Cap World G&I, when have you ever used a mid or small to compliment the large cap of AM funds?  Have you ever used ING's Global Real Estate fund to add diversification? You have never done any of this because you admit that your focus is the breakpoint and your firm would hang you for not hitting the breakpoint.  I know this as I did this when I was at Jones and I had to answer FSPends all day long.  Never mind the fact that we might be adding diversification to the portfolio, Columbia doesn't pay us enough revenue sharing.  My clients are much happier having owned Columbia Acorn Intl over the last three years in a C share than having saved two percent on a breakpoint.  You kill me - I would have rather owned Cap Ap in a C share over GFA at NAV over the last 10 years even in my own acct.  Have I cherry picked examples? Yes but I would also pick George Forman over you in a backyard brawl. 

If that isn't enough you admit that you don't even research what you sell before you sell it.  You didn't know what the annual fee on Mutual Discovery was you didn't read the prospectus. Do you even know what portion of the fund is domestic vs intl or is it all about the return since Jones lits it in the Growth and Income section of their monthly focus list, you are probably selling it as a domestic fund.

Maybe you should quit listening to your Am Funds wholesaler and start doing some research of your own, but that would cut into your arts and crafts time. 

PS Wash Mut, Bond Fund of Amer, GFA, Cap World G&I and Small Cap world is not a well diversified portfolio

Serenity Now, Serenity Now

[/quote]

Sorry, nice try.  I was actually the one teaching your class.  You must have been that goober that didn't pay attention to anything I said.  No wonder you had to leave Jones.

As far as mixing fund families goes, I'm guilty as charged.  I do like to hit breakpoints.  Well, truth be told, I don't really like it.  But it's good for the clients when they have enough money. 

I've actually been working on something like you mentioned.  A best of the breed portfolio.  That way I can put it in front of my new clients that I stole from you and tell them that I can build it whichever way they want. 

The TEDIX was my own fault.  I did look at the returns over the expenses.  I know it's an international fund and I sell it that way. 

I don't know that the firm would hang me.  Maybe I'd have to answer a few more wires and send in a few more compliance letters.

Finally, since you're going to overanalyze me, I'll overanalyze you.  You go and try to run a hypo on your Cap App C for 10 years, Skippy.  Inception on that fund was 98.  And in 98 you probably weren't using Hartford funds because they hadn't been around all that long and it's difficult to sell a fund with no track record.   You probably started using them when some RL stood up and said "I don't sell American Funds anymore because they pay the least amount in revenue sharing.  I sell Hartford instead."   

wait a second, you took all of the ladiess money that was going to be used for a house and put it in mutual funds ???

Spaceman Spiff,

I will agree with you about having a good fund family and sticking with them.  Franklin is my main fund family because they have about any type of fund we could need to have a diversified portfolio full of GREAT funds.  Good job on that!

"Sorry, nice try.  I was actually the one teaching your class.  You must have been that goober that didn't pay attention to anything I said.  No wonder you had to leave Jones. "

No wonder I was dumber after attending that class than I was before I started.

You seriously need to think outside the box.  Take a look at the Columbia funds, ING funds, maybe even Dodge and Cox or T Rowe Price (oops, scratch the last two, you don't have a wrap account).    Better yet, ask your RL why fidelity isn't part of your line up. (hint, it has something to do with stealing Jones Money Market funds in the late 70's and you still hold a grudge).

You do have a point on the Revenue Sharing.  Although they have changed their system since this happened, my RL actually showed me how using preferred fund families enhanced the Rev Sharing section of the P&L and told me that I should use the fund families to help the profitability of the branch.  I don't know if this came as I was using fund families that didn't pay revenue sharing and St Louis requested he explain why I should stick to their funds or if he was trying to actually help.  Either way, it is that mentality that got them into trouble with the regulaters on Rev Sharing.

Well Spiffy…will you agree with the way JOnes model is set up…eventually you will have way to many clients to cover…Maybe you do…but most vets don’t touch base with all their clients…