And FWIW, I agree, I still think the expectations ramp up pretty quickly in the early years.  I did a $5mm GK (actually 4.5), but in reality it didn't turn into a whole lot.  But my expectations are like $2K higher than a new/new.  Now, the GK definitely did help me.  But not $2K per month in perpetuity.  I am out a little over 4 years, and my MINIMUM is like $16K per month.  Meeting standards is like $22K.  If I had been gathering annuitized biz all along the way (other than a million or so in C shares), rather than just recently with Advisory, I could already be close to hitting the minimum just on my advisory fees alone.  Instead, I have to balance adding advisory business with commissions in order to hit my numbers AND feed my family.

Spiff,

I too was unclear on that.  I think, basically, as long as you are profitable (bonus eligible profit, not just location margin positive), it doesn't matter.  So if break-even for your office is 10K gross, you could get away with less than 22K.  If, however, you make the 22K and are not profitable, I THINK you are OK.  My break-even is somewhere around 15-17K, so no worries, but I would be curious.  That would suck to do 22K and not be profitable??  I doubt there are many in that situation.  I can't imagine having expenses so high that you can't make a profit at 22K.  One would think you would be in a very wealthy, expensive area.  I have an EDJ friend that works in the Fairfield region of CT (cha-ching), and if a new account for him is less than 500K it is a disappointment.  So it should all be relative.

b24- no never posted under another name and been with only Jones.

I am a little surprised that they just kind of plopped this thing down. I mean we have meetings to discuss what CAIBX is why not have a meeting on how much production they expect from us.... or what would be really interesting to have a meeting about what the hell your P&L really says LOL

[quote=Spaceman Spiff]

[/quote]

I am on our region's leadership team, and the way I understand the PIP is this, if you are under the $22k, but your office is profitable, then you are exempt from being placed on the PIP. If you are hitting the $22k, but your office is not profitable due to being in a high cost area, you will not be placed on the PIP, because you are doing the $22k.  If you have a certain length of tenure (can't remember how long), it exempts you as well. I don't agree with either of those exemptions. I do believe it was high time for EDJ to tighten their standards, and require more accountability out of their FA's, especially those who have been in the field underachieving for an extended period of time.

What does PIP stand for?

"performance improvement plan" aka do this or you're canned

239 months is the magic number to be exempt from a PIP.  I'm not sure I really understand why at 20 years in the biz suddenly it doesn't matter what your performance numbers are.  We've got a guy in our region who is about a year away from that right now and he is the poster child for the reason Jones needed to make a change.  If I've been at this desk for 20 years and I've only got $50mil AUM and I'm grossing under $300K a year someone needs to tell me to move on. 

Performance Improvement Plan.

Is the 22k for both Canada and US?

cnuk

Spiff, it's interesting that you say that.  I just did some quick math.  In order to hit the new "league minimum" of 22K, you would need approximately 50-55mm AUM at a velocity of 0.5%.  I use 0.5% for velocity, as that seems about accurate for a typical "mature" practice that is not all wrapped and not adding lots of new assets.  So you have to consider a few things in that situation:

1. Add more assets

2. Increase your velocity

3. Add other products (i.e. LTC, Life, DI, etc.)

In addition, another component of being "profitable" includes other non-commission products which give you credit on your P&L (i.e. credit cards, mortgages, total AUM for the holding credit from revenue sharing, IRA and other fees, etc.).  So I actually think it is fair to exempt people under 22K per month, because they are creating profit for Jones either through low overhead, additional non-commission products, or a combo of both.

I don't disagree.  If you are making a profit for the firm, the last thing I think they'd want to do is let you go. 

My point was more that if I spend that much time in this business and I don't ever get to the point where I'm bringing home $200K+, then I need to find a new line of work.  A doc I know said that her nurse anesthitist makes close to that.  I volunteered to put her patients to sleep for half of that.  I have lots of unread prospectuses in my office. 

Good point.  Although for a lot of 2nd-career guys, making 100K, working 20-30 hours per week doing something fairly low-pressure is a pretty good gig.  Most of the FA's out 20+ years that are low producers are older and at the end of their working years.  I could do this well into my 60's and be perfectly content making 100K and not working much, staying out of my wife's hair, and not tapping my retirement funds.

The whole message when I was there was when you are profitable it just doesn't matter....If you want to come in 2-3 days a week...ok. I can see where some of the guys that are out 15-20 years who are late 50's early 60's who are stroking a 20K a month without doing much are not going to like being put on a PIP. Maybe because they are profitable they will avoid it but ultimately you have to understand who owns the business and that is Jones......It is certainly their right to want more profit from each and every FA...

[quote=noggin]

The whole message when I was there was when you are profitable it just doesn't matter....If you want to come in 2-3 days a week...ok. I can see where some of the guys that are out 15-20 years who are late 50's early 60's who are stroking a 20K a month without doing much are not going to like being put on a PIP. Maybe because they are profitable they will avoid it but ultimately you have to understand who owns the business and that is Jones......It is certainly their right to want more profit from each and every FA...

[/quote]

I agree.  As we said, as long as the office is profitable, you are exempt from the PIP plan.  So if you live in Idaho, have $500 in rent and pay a BOA $9/hr. to come in 25 hours a week, you will likely be profitable at 12-15K.  In that case they will leave you alone.  The standards don't change whether you are profitable or not, they just indicate the minimum if you ARE NOT profitable. 

B24 and Spiff - The one thing about any situation at jones is that we can justify why they are making this change. However to me it doesn't change the underlying issues. First their level was 15, then 18, now 22.... To me it seems like a never ending slope.

Follow me here, I have been thinking of home office almost like our federal government. They both take their taxes out multiple ways and continue to ask for more "taxes" from us.

I however don't have a problem paying taxes, it is a benefit that an Indy or Nigerian doesn't have... however when my taxes go towards redoing Rt 56 each summer just so Billy and Bobby can have a job I get pissed. Likewise when my Jones taxes go up and are justified by Relationship manager, Development Leaders and "business inflation" I get pissed. I mean what should 5750 per month buy someone?

My problem is that I think going INDY is possible if I had 30 million book and thought I could take 15 but I don't yet. However when I actually get there, I probably won't go Indy b/c it will take too much effort. Please no bashing on that, has anyone felt the same way?

RW,

I see your point, but it's sort of misguided.  Increasing the minimum is not adding a "tax.  It is increasing your production at the same time.  To be honest, the number probably should have been closer to 20K for many years, they just never changed it.  Yes, they went to 18K briefly a few years back, but it had been 15K for like a decade.  The fact is, at 18K, most offices might be making money for the office, but honestly, that puts nothing in Jones' pocket.  Not that I am defending Jones, but as a business owner, I completely see their point.  WTF would I want the cost and compliance liability of 5000 offices that add no profit to the firm?  And all the big producers are basically subsidizing the unprofitable producers.

Your "tax" to Jones has never gone up.  It's basically stayed the same (60% more or less).  Asking you to produce more is not taxing you.  It's funny how everyone has always busted on Jones for their low hurdles, and now that they have raised the bar, everyone is all up in arms.  Again, Jones can't win no matter what they do.

And FWIW, this will not affect the newer people (under 5-7 years), as the bar is the same.  It will only REALLY affect veterans that are real low producers.  Honestly, do you think 22K is too much to ask from someone out 10 years?  And the Performance Plan for vets does not even go up to 20K until 2012, and 22K in 2013.  So it's not like this thing kicks in tomorrow (or even next year).  This gives veterans PLENTY of time to ramp up production to 22K.  I mean seriously, what's the delta ona veteran to get up to 22K consistently?  If you were 10 years out and producing 16 or 17K, your only netting 75K or so, so you're not doing very well to begin with.  But let's say you need to increase your monhtly production by 5K to egt to 22K.  That would require putting $6mm into Advisory Solutions.  Don't you think between now and 2013, you could find $6mm to put into Advisory?  I am 4 years out, and I am getting close to that.  It's not a monumental task.

I think everyone is over-thinking this thing.

I'm with you.  I spent some time yesterday looking at my P&L statement.  I don't look at the direct expenses very often because I don't control them.  But when I do, it just raises a bunch of questions.  For instance, we pay $675 a month for data.  What data?  Then we pay $75 a month for terminal and software.  Then we pay $75 for video and voice.  I'm still trying to figure out the voice part of that because there's a separate line item for the phones.  Then there's the nebulous "other equipment" at $50.  I'm guessing that's the check scanner.  Finally, unless there are other additional equipment, quotes, and access charges, there's market data and quotes at $60 and $65 (per user with real time quotes) respectively.  In my office there's an extra $50 a month for "other equipment" but I'm not sure I know what other equipment I have that costs $50 a month.  I'm going to have to call on that one.  

All that comes out to $1000 a month.  12,000 offices.  12 months in a year.  That's $144,000,000.  Really?  Do you think Jones is depreciating our technology assets?  My BOA said that it was stupid if they are depreciating the assets and making me lease them on a monthly basis.   

My point with all that was if they are now going to use profitability as a measuring stick, how about they work on making my office more profitable from their end too.  I can work to make my commissions go up, but I can't do much in the way of technology expenses, telephone contracts, etc.  

It's not enough to make me jump to the indy side of the biz, but I can see where a lot of folks might decide they can control their own costs better than EDJ can.     

B - we are way overthinking this thing.  But they've killed this forum with the changes so this is one of only two or three worthwhile things to discuss on here at the moment.