Thanks.

Good info and you are right I literally know nothing about computer systems. I still believe that paying 1000 a month for the phone system (not bill), computers, quotes, etc has to be really really expensive.

I mean with 12000 branches that is 12 million a year...

[quote=Spaceman Spiff]

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.     

[/quote] I think that Spiff is really on to something here...If jones bought those assets and depreciates them...Holy Cow!!!  Getting taken advantage of... Hmmm... 100,000,000 in technology purchases....just for math sakes

Gets depreciated at 20% first yr and 32% the second $52,000,000 in the first two years... How I would love to see an audited cash flow statement in detail from jones along with the tax return with all schedules. I am not a CPA but I wonder if there are two sets of financial communications to the LP's and then a different set to the IRS...and GP's like I said in the other thread it is not an environment where asking "real" questions is encouraged and when you do...you are made to look like the jerk or even better the naysayer.

JLC,

To be honest, I think the majority of our tech costs are associated with annual licensing and subscriptions to various 3rd party tech services.  I think people over-analyze things sometimes with regards to Jones.  I am not in the mood to go back through the tech stuff right now, but if you add up all the 3rd party software we use, it is pretty impressive.  I think last I counted, we had at least 10 3rd party platforms we utilize at the branch level.  And that does not include any of the "embedded" systems that we use and don't really see.

Don't forget, it also includes telephone systems, hardware (PC's, monitors, color photocopier, scanner/printer/fax, server, etc.) high-speed internet, video on demand, on-site systems support, etc.  This is in addition to all of the software mentioned.

I hear you... I was there long enough to know that there is a shield between GP's and the rest of the people. Every large business has some skeletons in the closet. I have never said that the costs are not justified. Being indy and paying for all of the nickel and dime stuff can be a pain too but in the end it works out better.  My issue is that I don't understand how is getting all of the tax benefits. Where is all of that depreciation going? If it is true that the technology upgrades are leased back to the FA's and the Capital Expenditures are depreciated...that just sucks for the FA. Because the firm gets to write off the capital expense and depreciate it I believe over 5 or 7 years and since it flows through for GP's it creates a loss for tax purposes while possibly having a positive cash flow... Just something to think about?

BTW I heard sugg box is out of control...

JLC,

I think you need to go back to Accounting 101.  First off, the "lease expenses" are not "charged" to the FA.  They are simply allocated to each branch that Jones owns (leases).  That's textbook accounting.  The depreciation is on Jones' books, exactly where it should be.

Depreciation and lease expenses (generally a cash expense) are always tax benefits for the company, not the employee.  Why would a W2 employee receive a tax break for depreciation for equipment?  Do you think Merrill FA's get to write off their desks or computers or telephones?  Then why would they are Jones??

Honestly, this is a weak argument against Jones.  No firm would ever give a W2 employee a tax break on....well...anything.  It just doesn't make sense.

[quote=B24]

JLC,

I think you need to go back to Accounting 101.  First off, the "lease expenses" are not "charged" to the FA.  They are simply allocated to each branch that Jones owns (leases).  That's textbook accounting.  The depreciation is on Jones' books, exactly where it should be.

Depreciation and lease expenses (generally a cash expense) are always tax benefits for the company, not the employee.  Why would a W2 employee receive a tax break for depreciation for equipment?  Do you think Merrill FA's get to write off their desks or computers or telephones?  Then why would they are Jones??

Honestly, this is a weak argument against Jones.  No firm would ever give a W2 employee a tax break on....well...anything.  It just doesn't make sense.

[/quote]

As I said before I am not a CPA or an accountant...just a question. Questions about transparency. I am glad that you understand accounting and I don't think the accounting 101 comment is warranted since it was previously stated....good for you....I hope you feel empowered. Since you know about accounting, then the question is about company tax benefits vs employee tax benefits and the flow through and tax benefits to GP's vs their risk. These are questions I have always had but the longer I am gone the less interest I have in what goes on there..Transparency and communication have always been my issues with jones there is always some mystery out there about the inner-workings of the firm. It reminds me of the movie "The Firm" this lack of transparency and mystery about where I was headed, about how LP was allocated etc...eventually helped drive me out.

JLC- I really agree with what you say about asking questions. I had a GP on the phone the other day and instead of answering my questions the GP made me feel foolish for asking the questions. I then made it aware that I knew my question was not foolish and that I really wanted an answer. The response to that...

"I will leave you with this" says the GP after not answering my quesiton and trying to railroad me into giving up. It was so obvious that the GP was actually TRYING to intimidate me...

I found it sad.

[quote=RealWorld]

JLC- I really agree with what you say about asking questions. I had a GP on the phone the other day and instead of answering my questions the GP made me feel foolish for asking the questions. I then made it aware that I knew my question was not foolish and that I really wanted an answer. The response to that...

"I will leave you with this" says the GP after not answering my quesiton and trying to railroad me into giving up. It was so obvious that the GP was actually TRYING to intimidate me...

I found it sad.

[/quote]

Yeah there have been a few people that have stood up in regionals and have asked questions in front of the group questioning processes or whatever was on their mind...They are supposed to be town hall mtgs and I understand the need to keep things in order but there is certainly a common agenda to keep things fenced in...

Always be careful about what you ask in a regional or town hall meeting. You don't want to be labeled as one of the "others"......

The "others" don't seem to last very long.  We're pretty good at disposing of the bodies and distributing the assets quietly.   

The comment about Regional Meetings that are supposed to be town hall like meetings I find, um, well, laughable.  They're not set up to be town hall meetings at all.  They have very specific, very strict agendas.  Most of which are set by HQ, not the region.  Once in a while you get an Area Leader who is willing to open the floor to general questions, but not very often.  Those meetings are designed to tell you what you need to hear about Jones.  Nothing more.  That's especially true over the last few years when they've shortened the Summer meeting by a day.  We're lucky to get one sales panel that gives us any sort of useful info.  I just looked a the agenda for this year's meeting and nowhere does it imply that our HQ GP will be opening himself up for general questions. 

JLC - how much more transparent do you want Jones to be?  You can go online and read the 10-K yourself.  There's a lot of transparency in that document.  As to the tax questions you evidently still have lingering in your mind, I think the same answer that B24 gave you can be applied to pretty much any tax question you have about Jones.  The firm and the GPs take the big risks.  Therefore they get the big tax breaks.  I, as an FA, don't risk any capital, so I get no tax breaks.   

Not being in the inner sanctum of any company will lead to questions about the workings of the firm.  What obligation does the firm owe you, an employee, to talk about how they choose to run the company?  I'll answer that one.  None.  You're an employee.  Their obligation to you stops at the paycheck they give you. 

With that said, are there questions I'd love to have answers for?  Yep.   Will getting the answers to those questions materially affect me?  Nope.  For instance, I'd really like to know that the GP's average return on their GP dollars has been over the last 10 years.  I'd also really like to know who Conestoga is.  The question is, what do you do with that info after you get it? 

Spaceman makes a lot of good points. As far as what Jones owes each of us, they really have the right to choose how open they are. The GP's run the company. They answer to their management group, not to the individual FA's. And with that in mind, I would suggest we all be careful how much kool-ade we ingest. We don't owe anyone any more than what is in our own best interest to give. That is the way companies treat workers, and that is the way workers should treat companies in return. Nothing personal, just business.

[quote=Spaceman Spiff]

The "others" don't seem to last very long.  We're pretty good at disposing of the bodies and distributing the assets quietly.   

The comment about Regional Meetings that are supposed to be town hall like meetings I find, um, well, laughable.  They're not set up to be town hall meetings at all.  They have very specific, very strict agendas.  Most of which are set by HQ, not the region.  Once in a while you get an Area Leader who is willing to open the floor to general questions, but not very often.  Those meetings are designed to tell you what you need to hear about Jones.  Nothing more.  That's especially true over the last few years when they've shortened the Summer meeting by a day.  We're lucky to get one sales panel that gives us any sort of useful info.  I just looked a the agenda for this year's meeting and nowhere does it imply that our HQ GP will be opening himself up for general questions. 

JLC - how much more transparent do you want Jones to be?  You can go online and read the 10-K yourself.  There's a lot of transparency in that document.  As to the tax questions you evidently still have lingering in your mind, I think the same answer that B24 gave you can be applied to pretty much any tax question you have about Jones.  The firm and the GPs take the big risks.  Therefore they get the big tax breaks.  I, as an FA, don't risk any capital, so I get no tax breaks.   

Not being in the inner sanctum of any company will lead to questions about the workings of the firm.  What obligation does the firm owe you, an employee, to talk about how they choose to run the company?  I'll answer that one.  None.  You're an employee.  Their obligation to you stops at the paycheck they give you. 

With that said, are there questions I'd love to have answers for?  Yep.   Will getting the answers to those questions materially affect me?  Nope.  For instance, I'd really like to know that the GP's average return on their GP dollars has been over the last 10 years.  I'd also really like to know who Conestoga is.  The question is, what do you do with that info after you get it? 

[/quote]

You can't be seriously suggesting that Jones is transparent are you????? I have heard you say some really off the wall statements but that has to be the most laughable one that I have ever read that you have written.....

Both of you are right...I have mentioned before that I have a need for being in control..having unanswered questions is something that I was not happy with at all. Having a 40% payout and being an employee were two things that eventually I was not willing to compromise about. That is why I don't work there. I think for the reasons stated you have come to some solid conclusions about Jones. I don't believe Jones is a bad place for people that carry the same thought process and perspective that you have. We have different goals and aspirations. I wanted the control and you are willing to give some control up for comfort and less stress... There will always be that balancing act at every firm.  A Value proposition just like we do for our clients...no different in many aspects.

What I hear is that you are OK with the arrangement... I actually believed in the company for a long time and when I came the realization that (like navet said) "it's just business no matter what"...I kinda lost it because my reality was crushed. My RL had no power, My AL had no power either...there was someone else pulling the strings...What I thought was not reality...The RL and AL admitted to me that they were puppets... The nails were in the coffin then for me.  I was too trusting...I was too nice of a guy... I felt misled not by those around me (RL other FA's etc) but by the next layer of mgmt who treated me like a number after I gave a decade of my life to the company...

Enough of the dear john... I am much better off now

[quote=noggin] 

You can't be seriously suggesting that Jones is transparent are you????? I have heard you say some really off the wall statements but that has to be the most laughable one that I have ever read that you have written.....

[/quote]

In a way, yes I am.  For the purposes of furthering this discussion, what do you think Jones isn't telling us that would be critical for the average employee to know and understand? 

spaced out one

where does the firm get the koolaid from?

Actually a breakdown of how a branch is profitable and what my expenses really are.  $1000/month for technology why do I pay for a phone, etc. etc  Isn't that coming out of the 60% of the commissions that St.Louis keeps....sounds like double dipping to me.

The Piggly Wiggly I believe.  We order it in bulk. 

The technology breakdown is actually listed in Jonesnet.  It's really difficult to find.  You type in P&L expenses into the search function on Jonesnet and click on the second option.  Ta -Da!  Breakdown of technology expenses.  Now, it's not a line item breakdown, ie $40 a month for SunGard Financial Planning Software, $20 a month for CRM software, $30 a month for licensing for Microsoft software, etc.  However, it's there in general categories.  Would I like to see the entire breakdown?  Sure...once.  

We don't pay our phone bill at Jones any longer.  There is a $50 a month charge for "other equipment" which I'm assuming means my scanner/fax/copier, check scanning machine, printer, server, and the phone sytem.  Which they upgraded recently.  So if that' what you're talking about, I'm not sure how much more transparent you'd like them to be.    

I'm not sure why profitability is such a mystery to you.  It's all there in your P&L statement.  I think the problem is that very few people actually take the time to do any digging into their P&L to figure out how it works. 

OK, the 60% question.  How do  you think Jones pays the vendors that they use for the services that they offer?  Of course they use the 60% that they keep.  Let's think about this one for a moment and go back to the technology comment before.  Remember when you're dealing with software licensing, your often having to do it per user.  That means for the average branch, everything you need has to leased for both the BOA and the FA.  Here are some of the things, not a complete list, that we have access to in our branch that the firm more than likely leases:

Internet access, quote monitor, AnnuityNet, BondNet, FAST (SunGard) planning software, Fax Management software, Microsoft Outlook, S&P research, Morningstar Workstation,  Document Scanning, blah blah blah...

I could keep going.  I've not even scratched the surface.  The point is that when you simply look at the basic tools we are provided, if they have to lease them per user, the costs can add up pretty quickly. 

So, they take the money they pay those vendors out of their 60% cut and then tell us, through the P&L, that they've spent the money.  I do find it interesting that it all adds up to $1000 a month EXACTLY.  Weird, huh. 

Of course out of that 60% they also pay my BOA, all of the HQ people that do the work behind the scenes to make sure I have the time to waste on RR all day, provide benefits, pay my rent, utilities, etc.  All of that gets listed on my P&L.  It's not really all that secretive or mysterious. 

Okay Spiff....

Break down technology charges on a line item basis.

On Annuities explain the difference between what jones collects in commission dollars and what they pay the advisor on.

On Mutual Funds the same thing.

Break down the profit that the fixed income desk makes.....

What the GP and LP and SLP returns are reported quarterly......

hey I'm on a roll. the weekend came early for me so I can afford the time today.

taking from another thread I mentioned that your firm has lost a bit of coin up der in kanada.  over the past decade there were losses in the UK as well.  To close up shop in the UK is going to cost a minimum of $70 Million and north of the 49th it has amount to anywheres between $180 to $360 million and the losses are still coming in.  Although these are for "international lines"  that some of the pro-EJ posters posters would rather look the other way or aren't concerned about these miniscule amounts.  It shows a lack of commitment to success,  prudent due diligence and planning at the very least.  When will this sort of madness end?

You're still at it?