Edward Jones' Incentive Trips
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Not that I have a mortgage, but I seriously can’t see the comparison, spicey. Whenever you have something (preferred funds, categories) tied to a gift (revenue sharing, trip) you cause an uneeded conflict. Yes, you can all say…"we don’t look at the trip categories…if I win great…if I don’t oh well…I only use the best funds and if they happen to be in the preferreds,great…but THEY (management) have these for a reason…and its not about financial planning for the client…
Superior performance is rewarded in many ways, one of which is through incentive trips. Trips are awarded when you succeed in meeting the long-term goals of your clients through diversification of their assets. There are two opportunities to earn trips each year. You also may combine the two into one “Super Trip.” Destinations include top-notch resorts in places such as Hawaii, Switzerland, the Caribbean, Africa and Paris, to name just a few. All trips include spouses and many welcome families, too.
All Financial Advisors who meet the criteria earn a trip. There is no limit on the number of Financial Advisors who can participate. We’re proud to say that, typically, more than half of our Advisors qualify for each trip. Trip value typically ranges from $4,500 to $6,000 for two people or $10,000 for a “Super Trip.” Please note that all trips are taxable. To qualify, all you have to do is gross $135,000 in six months." Now it's an "Incentive travel trip" It's also a recruiting tool: http://careers.edwardjones.com/us/fa/ExperiencedFinancialAdvisors/AreWeRightForYou/MeetOurPeople/jWEB_004061.html "Believe it or not, one of the vets used to send my husband diversification trip brochures to show him where we could be going if I worked at Edward Jones." Check out SEC's view: http://www.sec.gov/litigation/admin/33-8520.ht 15. Edward Jones further offers "diversification contest" trips to its IRs two times each year. During these contests, the IRs can qualify for a trip by earning points based on, among other things, their sales of mutual funds. Once an IR earns a specific number of points, the IR "wins" a trip. Although the IRs generally can earn contest points for selling any mutual funds or other investment product, for a ninety-day period in the fall of 2002, Edward Jones only gave mutual fund contest points for the sale of a subset of mutual funds from the Preferred Families. One or more of the Preferred Families always participate in the sponsorship of the diversification trips and make one short training presentation for the IRs during each trip. Sponsorship of these trips and other meetings provide the Preferred Families with exclusive access to and visibility with the IRs. Can you say: Pay to Play?
WestH-
I agree with 100%. You mis-read my post. I said (or meant to say), that I think they SHOULD consider them benefits, not compensation. My point was that I don't like how they position them as part of our compensation.It does make one wonder why Jones hasn’t changed it to a revenue only contest. At least then, it would remove any appearance of conflict. I have to agree with Spears on this issue.
Spiff- You are smarter than the average Jones rep. (That's why some of us think your headed out.) You remind me of me. I was a staunch supporter of the firm until something inside caused me to question management. Soon I was conflicted representing a firm because I did not believe in their ethics. Ultimately the pain of staying was worse than going through the pain of transition. Please, please don't label this response as another disgruntled FA who offers frequent diatribes about how great indy is and how crappy working for Jones was. Jones is a great place to start, learn the biz, and how to run a biz. I am sure if it weren't for the training I received at Jones, the transition would have been much more challenging when I left to go indy. Your time is coming. It's just a matter of when not if...Jones hasn't changed it because they want to encourage diversification. It's a reward for doing what is right.
WestH - I love the SEC example. Way to pull something so far out of Jones history that it's not even relevant anymore. Jones did something for half of a diversification contest period and changed it. Quickly.
You've been gone from Jones so long that most of your examples of things you don't like about Jones aren't relevant anymore. I've told others that if you haven't been at Jones in the last 2 years, you really don't know what you are talking about anymore.
foot - I love working for Jones. If management changes or goes a direction that I'm not comfortable, I'm going to see if Joe has an empty room in his new office. But until then I'm sticking. If I were a cowboy they'd say I was loyal to the brand.Spiff:
You're exactly right. I have left Jones a long time ago, exactly 9 yrs ago in 2 wks. My Independence day was June 4th. Spent 7 yrs w/ Jones, & would like to thank them for the all they've done to get my career off the ground. I also spent 4 yrs in college & also served 9 yrs as a military officer before Jones. Although none of those org are perfect in any way, I still love the fact that they all have a profound impact on my daily life today. That I still live the high standards & morals they instill in me. But that doesn't mean I don't have an opinion either way, good or bad, just because I've left them more than 2 yrs ago. Still very involved in those collegiate & veteran organizations locally. I can see the massive amount of change that our educational system & the military are going through over the years. But besides adding the fee-based platform, how/what has really changed at Jones in the past 2 yrs? & Is it change for the better or worse? Let's see, I was the very first Jones IR to move over to LPL Independent channel in our city 9 yrs ago. Today there's over 30 ex-Jones guys over at LPL just inside our city limits. How many LPL reps left to join Jones? Zero.[quote=WestH]Spiff:
...Let's see, I was the very first Jones IR to move over to LPL Independent channel in our city 9 yrs ago. Today there's over 30 ex-Jones guys over at LPL just inside our city limits. How many LPL reps left to join Jones? Zero. [/quote] It's just a matter of time. They'll see the light one of these days.Technology, management, mindset, investment options - you name it, it has changed. For the better. Still not perfect, but then what firm or situation is?
I wouldn't expect anyone from LPL or RJ to leave that setup and go back to being a w-2 employee. The change in thinking would probably make your head explode. You have a right to your opinion, but you have formed that opinion based on information that was valid in 1999. It's like talking about the Rams and saying they're a great football team since they won the Super Bowl in 2000. Sure, football is basically the same game, but the Rams/Sheep sucked last year.Don't kid yourselves, there are tons of IR's who when the contest period is nearing an end sell certain categories to get their trip. This is a FACT.
It is a conflict of interest however you look at it, and it affects some clients portfolios.Still wondering, does EDJ still offer sales incentives in the form of a higher commission for selling certain bonds at the end of the commission cycle? I remember seeing low rated bonds with higher than normal commission in the last 2 or 3 days of the cycle, they would sell really fast. Amazingly they were the same bonds in inventory all month at a lower commission, and nobody would sell it. Can anyone comment on whether or not this is still a practice followed at Jones?
About the bonds, been gone for 18 months so could be different:
New brokers got access to a NEWIR inventory back then that had a higher payout and they would reserve a pile of them for the rookies for call nights, can sell dates etc. Otherwise there really wasnt much of a variance. Jones had a basic chart that said this much markup for this size and or this maturity date.
The biggest mistake about the bond inventory is the markup and selling the new issue bond. When you sell they price you first to their own internal inventory with a markup and they will price outside of Jones if you request it. If you are a Joneser you are better off calling the bond desk and asking them to do some lite shopping for you. The bond you sold last quarter with a 3 point markup as a new issue can be had for a lot less. Your GP’s wont like it because its unconventional and they want to move their own bonds they helped underwrite and/or participated in first to maximize profits that you really dont see to your P&L but do see as a partner.
One side note, if you sell a lot of bonds as a Joneser you will be eating your lunch when rates rise a few years from now and you have to explain those lower auction values. But if you are a good joneser you will take advantage of that to sell them and make 1 and then put them into your new mutual fund fee platform.
Spiff:
At least we both have a warped sense of humor. But what has really changed about Jones' incentive, oops I mean diversification, trip over the past 2 yrs vs. 10 yrs ago? (besides trip location choices)WestH,
Need I remind you only 1/2 of LPL brokers even GROSS 100k? Your comparing apples and oranges. Also, your previous post mentioned a taxable amount for a trip of $8000, where did you go to get a Jones taxable equivalent that high? Most of mine are from $4500-5500. Your cost for a flight to Costa Rica was $500, mine would be twice that. Don't forget about the free dinners, coctails, happy hours, and cash they usually kick in as well. There is no way you could set up the same trip for the same price they tax you on. Sorry, you are wrong on this one. Of the 30 brokers that switched to LPL, I would venture a guess that all but one or two were either fired or below Seg 4 when they switched. There is a reason the median production at LPL is 100k, the same amount I did my second year at Jones. After you pay boh sides of FICA, E&O insurance, an office assistant and her and your family's health insurance, 10% ticket charges, 10% affilliation fee, office rent, postage, software, telephone, marketing, utilities, publications, annual state security dues, insurance CE, and other expenses.....somehow I just don't see a 90% payout.Rank,
That’s what I’ve always heard from the region. But you know, we’ve got quite a few guys who were below Segment 4 numbers, who left, and are now grossing 400-500k.
Do you really think people are leaving for the higher payout? It’s unlikely. They are leaving because they are tired of people blowing smoke up their butts and tired of having to explain to clients why they can’t handle certain transaction/types of accounts.
The same people at LPL grossing 100k are the same people at Jones that have been stuck in Seg 3 for 12 years. Their are at least 10 brokers like that in my region. Some have been in Segment 2 for 5 years and the firm hasn’t fired them. Let’s get real. You’re going to succeed wherever you are, or you are going to fail where ever you are.
And let’s not forget… there are Jones people on Jones trips. I think you have to ask yourself is it worth it? Let’s talk about opportunity cost. While you are at a Jones trip at a Jones dinner, drinking jones cocktails with Jones people, think of the opportunities that you are missing in Bejing, or London, or on the Galapagos Islands.
Also, let’s talk about the encouragement to “do the right thing”.
Scenario 1: Jones broker who needs the tax free income category. He needs $2000 gross to get there. He is out of luck. Client does NOT need tax-free income. He’s got an IRA with the Jones guy. He just inherited some money. He is in a low tax bracket. What does the Jones guy do?
Scenario 2: Broker needs $2000 gross to go on a trip. Same scenario.
Which one has a conflict of interest?
[quote=rankstocks]WestH,
Need I remind you only 1/2 of LPL brokers even GROSS 100k? Your comparing apples and oranges. Also, your previous post mentioned a taxable amount for a trip of $8000, where did you go to get a Jones taxable equivalent that high? Most of mine are from $4500-5500. Your cost for a flight to Costa Rica was $500, mine would be twice that. Don't forget about the free dinners, coctails, happy hours, and cash they usually kick in as well. There is no way you could set up the same trip for the same price they tax you on. Sorry, you are wrong on this one. Of the 30 brokers that switched to LPL, I would venture a guess that all but one or two were either fired or below Seg 4 when they switched. There is a reason the median production at LPL is 100k, the same amount I did my second year at Jones. After you pay boh sides of FICA, E&O insurance, an office assistant and her and your family's health insurance, 10% ticket charges, 10% affilliation fee, office rent, postage, software, telephone, marketing, utilities, publications, annual state security dues, insur?ance CE, and other expenses.....somehow I just don't see a 90% payout.[/quote] Rank: Where/how did you get the figures that 1/2 the LPL reps make under 100k? Can you verify that fact? or it the same Kool-Aid lies that feed you at Jones? From an earlier post, one of you Jones guys stated that they taxed you 30% of the trip's value. So if you get taxed $800 a month for 3 month, you paid a total of $2400 total, well, that's 30% of an $8000 trip. So if your trips are only $4500 - $5500, then your taxes are just $450 - $550 a month for the next 3 months? I was paying more than that 10 - 15 yrs ago. So where's the HUGE economy of scale discount on the taxes?And, Rank, Of course you don’t “see the 90% payout”…Because you’re at Jones!!!
Only us special people in the Independent world see those 90% payouts... BTW, what's your net payout after you subtract: your family's health insurance, 1/2 postage, 1/2 phone, marketing, pubs, & other expenses from 38% payout?I was on a div. trip a couple months ago, and one of the GPs showed a PowerPoint that alleged that nearly every other firm in the country is losing advisors.
Of course, Jones is the only firm, according to him, that's growing. I got back and went to the websites of a few of the firms he'd mentioned (the ones I could remember), and they ALL showed growth in the number of advisors, year after year. Someone needs to get their facts straight.Postage is now 100%, so is long distance. A pain for me, with overseas clients.
I will say this, even the LPL recruiter doesn’t say it’s 90%. But 65-70% is still almost double.