Ej money losing international operations
131 RepliesJump to last post
[quote=canucklehead]Spaceman Spiff wrote:
BTW, your starting to sound like a politician. Your talking in catch phrases - "Jones is a great place to start" "Jones management lied" "You don't know what you don't know". You're wearing a "Yes We Can" button right now aren't you? ++++++++++++++++ All right, boys, break it up. It was fun for a while, but now somebody's gonna get hurt. You both make good points, but Spiffy, you've gone too far. Calling a guy a politician? And a "Yes We Can" man at that? YOU HAVE CROSSED A LINE, SIR. [/quote] Had I been drinking milk, it would have come out of my nose.I'm glad we're all friends again!
Spiff, any guy who can laugh at himself is OK with me. Lord knows I'm forced to do that myself all too frequently. I actually have respect for both you and BC: I think that you both express your positions with passion, commitment, gentlemanliness and eloquence - characteristics that I haven't seen everywhere in this business.
FWIW, I think you're BOTH right, for your own reasons.
“Jones management lied”
For me it was the revelation that Jones management had a huge conflict of interest with Hartford and had a duty to disclose to us that relationship. They chose not to, and it wasn't until the disclosure was required by the SEC that we found out. Old news yes, but it was the signal that I needed to leave because as a representative of the firm, an employee, I couldn't trust them to hold to their word. "The clients interests always come first." Clearly in this situation that wasn't the case. Hartford was new to the fund world and supposedly went through rigorous filters to be accepted by Jones. What it was is they paid the GP's the most and Jones owned an income interest from the very beginning. Slimy to its core.Big Cheese- I hear you. In a way, you don’t really understand the company until you are so deep in the company that it is painful to leave.
Cheese,
I left Jones for some of the same reasons you did. Others may have viewed it differently, but when Jones announced that they had settled with the SEC (and paid a massive fine) in Dec. 04, I was humiliated. I tried to be cavalier with clients who raised the subject, and it was quickly forgotten. But privately, I was mortified to be associated with a company that would do such things - and though I lost no clients, a couple of prospects told me that they would not deal with such a company. I got over it, of course, but I was angry at Jones. I was even angrier with myself for having been surprised by their behavior. After all, I've been around a bit...am I surprised when a politician lies? NO. Do I believe everything (or anything) a car salesman tells me? NO. When I looked at the GP page on JonesNet, what did I see? With a few exceptions, a company owned and operated by SALESMEN. So why was I surprised when I found out they'd been fined for lack of disclosure? Naivete and foolishness on my part - and I'll try to make sure it doesn't happen again. Shame on me! This is not an indictment of salespeople in general - the world is full of salespeople who have integrity, and treat others with dignity and respect - it's an indictment of ME, for having been foolish enough to think Jones was as different as they said they were. And please don't flame me with the "it goes on everywhere" line - it doesn't go on everywhere, and even if it did, that wouldn't make it right. I'm not being preachy, but I'm sick of corporate malfeasance, political lies, toxic loans - it all has dishonesty at its root, and I'm sick of it. UGHH!I love this whole EDJ lied to us discussion in regards to revenue sharing and Hartford.
First, let me say that I respect both of your decisions to leave a company who you feel did something inappropriate. That doesn't mean I have to agree with you. I just took a quick look at the 10-K filing for the Jones Financial companies all the way back to 1997. Now, you're assertation is that EDJ lied to you. Well, if that were to be true there wouldn't be any discussion at all about revenue sharing at all in those documents. That is certainly not the case. It's in there had you cared to look. Truth was that back then virtually none of us knew what revenue sharing was, much less that it was such a large part of the EDJ bottom line. If you looked at it in the 10-k you'd find it under fee revenue sources along with interest income, IRA fees, etc. If you were really all that concerned about it after reading the 10-k you would have called Tom Miltenberger and asked what revenue sharing was. Or you'd have called your RL and asked him. The fact that you didn't doesn't mean that EDJ lied to you, it means that you weren't aware of it or didn't care about it. There's a difference. Now, you could make a valid argument that they should have told us why we had the preferred fund families. But then most of didn't really care why, we were just happy that someone besides us was doing the due diligence on them. I know, I know, part of the due diligence was will you pay us revenue sharing or not. Those that passed both the performance/management hurdle and revenue sharing hurdle got to be on the list. Now, that didn't mean that those were the only companies you could have done business with. B24 (sorry to drag your name into this) has been very clear that he has done his own research and doesn't use all preferred funds. You could have done that exact same thing. That would have been good for clients, don't you think? But now, you no longer have to worry about that because the companies you've associated with don't do ANYTHING shady like that. They don't do revenue sharing. They ALWAYS tell you how they're spending the firms resources in complete detail. You might want to check this link out: http://lplfinancial.lpl.com/Disclosure/Conflicts_of_Interest.htm or this one: http://www.raymondjames.com/disclosure_mutual_funds_co.htm or this one: http://www.commonwealth.com/Investors/revenue_sharing.asp I could go on with the cut and paste, but you get the point. Participating in a common industry practice doesn't constitue lying to you, IMHO. Now the Hartford thing...I really wish they would have just told all of us that they made an investment in Hartford's mutual fund business from the get go.Like I said in the previous post, Spiff, I was much angrier at myself than I was at EJ. OF COURSE they had preferred funds, and OF COURSE the GPs were getting a little sumpin-sumpin through the backdoor. What kind of rose-colored glasses was I wearing not to know that? Jeez, I piss myself off sometimes. I know that when I go to the tire dealer and open the catalogue, well, whaddayaknow, Michelin tires are the first ones I see - and did Michelin pay more for that product positioning? OF COURSE. If I want a brand that might be more economical, it’s up to me to keep turning the pages. And if I go to the grocery store, OF COURSE the $7 Kellogg product is at eye level. Nice and easy, no bending over. And if I want the generic corn flakes, they’re on the bottom row. Did Kellogg pay for that positioning? OF COURSE.
It's up to me as a hopefully non brain-dead consumer to understand that product manufacturers have an intimate understanding of human nature, brand loyalty, and so on. And it is equally up to me to understand that I PAY for convenience, and that retailers will seek payment from manufacturers to "help" consumers make a decision. Caveat emptor, right? But the rev share situation was different. There was a middleman - ME - and I was encouraged to hold myself out as unbiased. If a fund family appeared on the preferred list for any reason other than EJ TRULY AND OBJECTIVELY BELIEVED IT TO BE BEST OF CLASS, then, IMHO, that's dishonest. I know this is an OLD subject, and hopefully EJ is now the firm you want to be. But sad to say, there's never just one c***roach... Spiff, I hope I'm a mature enough individual to respect other people even when their opinions conflict with mine. And as I posted before, I think you're a bright individual who posts intelligent and thoughtful opinions. But good God, man, you can't possibly believe that what EJ did was ethical...can you?Wow, the software bleeped out c***roach? I wonder if d***roach would have worked…
It was unethical. It’s a bit like cheating on your wife. You may have the roses and hotel rooms all over your joint credit card statement, but if she (your wife) doesn’t check it, you still cheated. If somehow when you are running for office eight years later and it comes out, does that mean you didn’t cheat?
Yeah, you can’t even put John Hanc*** without the software bleeping you.
Was it unethical? I guess it depends on which company you're talking about. Jones FAs had been using some of those fund families for years before revenue sharing agreements became the thing to do. American, Lord Abbett, Putnam, Van Kampen, Federated - all of those were funds that Jones FAs had been using for a long time. Heck, Ted Jones himself had the meeting with the American Funds folks. And Jack Phelan started selling things like Affiliated and ICA back in the 50's. Federated ran our MMKT. Voyager was a firm favorite for decades. Can you argue that we wouldn't be selling Hartford or Goldman if there wasn't a revenue sharing deal? Maybe. Nobody was selling Goldman anyway, but that's another topic. Oppenheimer and Franklin, I believe, became preferred funds after the revenue sharing disclosures became more obvious. I don't really know how revenue sharing got started at EDJ. I've heard the theories about Doug Hill being the driving force, but I've not ever heard anyone confirm it in any sort of official manner. I know the phrase revenue sharing doesn't show up in the 10-k before 1997, but I don't know if it was happening before that. Could you perceive it as unethical? Yep. Do I? Nope. It didn't hurt my client. Had I used Amercian Funds or Putnam or Lord Abbett funds with or without revenue sharing, my client's performance would not have been affected either way. The only arguement you could make is that I might have used a completely different fund family. I don't know if I would or wouldn't have. I have yet to have anyone tell me how my client was negatively affected by revenue sharing.[quote=Spaceman Spiff]Yeah, you can’t even put John Hanc*** without the software bleeping you.
Was it unethical? I guess it depends on which company you're talking about. Jones FAs had been using some of those fund families for years before revenue sharing agreements became the thing to do. American, Lord Abbett, Putnam, Van Kampen, Federated - all of those were funds that Jones FAs had been using for a long time. Heck, Ted Jones himself had the meeting with the American Funds folks. And Jack Phelan started selling things like Affiliated and ICA back in the 50's. Federated ran our MMKT. Voyager was a firm favorite for decades. Can you argue that we wouldn't be selling Hartford or Goldman if there wasn't a revenue sharing deal? Maybe. Nobody was selling Goldman anyway, but that's another topic. Oppenheimer and Franklin, I believe, became preferred funds after the revenue sharing disclosures became more obvious. I don't really know how revenue sharing got started at EDJ. I've heard the theories about Doug Hill being the driving force, but I've not ever heard anyone confirm it in any sort of official manner. I know the phrase revenue sharing doesn't show up in the 10-k before 1997, but I don't know if it was happening before that. Could you perceive it as unethical? Yep. Do I? Nope. It didn't hurt my client. Had I used Amercian Funds or Putnam or Lord Abbett funds with or without revenue sharing, my client's performance would not have been affected either way. The only arguement you could make is that I might have used a completely different fund family. I don't know if I would or wouldn't have. I have yet to have anyone tell me how my client was negatively affected by revenue sharing. [/quote] Didn't hurt your clients? Spiff ... you are classic buddy. Can't see the forest through the trees. Where did that money come from to pay the rev. sharing? Um, I'm gonna guess FEES! Your clients paid them. Just drink water this weekend - no kool-aid!How did my clients pay them? Revenue sharing isn't a Jones specific revenue generator. So, if the argument is that without the revenue sharing agreements at EDJ my clients 12-b1, shareholder accounting, and other internal expenses would be lower, then I think that's a really weak argument.
Spiff is like a battered wife, “Billy Bob is a good man”, every time he gives her a black eye.
[quote=Spaceman Spiff]
I love this whole EDJ lied to us discussion in regards to revenue sharing and Hartford.
First, let me say that I respect both of your decisions to leave a company who you feel did something inappropriate. That doesn't mean I have to agree with you. I just took a quick look at the 10-K filing for the Jones Financial companies all the way back to 1997. Now, you're assertation is that EDJ lied to you. Well, if that were to be true there wouldn't be any discussion at all about revenue sharing at all in those documents. That is certainly not the case. It's in there had you cared to look. Truth was that back then virtually none of us knew what revenue sharing was, much less that it was such a large part of the EDJ bottom line. If you looked at it in the 10-k you'd find it under fee revenue sources along with interest income, IRA fees, etc. If you were really all that concerned about it after reading the 10-k you would have called Tom Miltenberger and asked what revenue sharing was. Or you'd have called your RL and asked him. The fact that you didn't doesn't mean that EDJ lied to you, it means that you weren't aware of it or didn't care about it. There's a difference. Now, you could make a valid argument that they should have told us why we had the preferred fund families. But then most of didn't really care why, we were just happy that someone besides us was doing the due diligence on them. I know, I know, part of the due diligence was will you pay us revenue sharing or not. Those that passed both the performance/management hurdle and revenue sharing hurdle got to be on the list. Now, that didn't mean that those were the only companies you could have done business with. B24 (sorry to drag your name into this) has been very clear that he has done his own research and doesn't use all preferred funds. You could have done that exact same thing. That would have been good for clients, don't you think? But now, you no longer have to worry about that because the companies you've associated with don't do ANYTHING shady like that. They don't do revenue sharing. They ALWAYS tell you how they're spending the firms resources in complete detail. You might want to check this link out: http://lplfinancial.lpl.com/Disclosure/Conflicts_of_Interest.htm or this one: http://www.raymondjames.com/disclosure_mutual_funds_co.htm or this one: http://www.commonwealth.com/Investors/revenue_sharing.asp I could go on with the cut and paste, but you get the point. Participating in a common industry practice doesn't constitue lying to you, IMHO. Now the Hartford thing...I really wish they would have just told all of us that they made an investment in Hartford's mutual fund business from the get go. [/quote] Not that I think it's right, but why is nobody concerned with the fact that ALL broker/dealers have revenue sharing agreement, as outlined above? And some (I only looked at the first one, LPL) have FAR MORE revenue sharing agreements than Jones. So again, I don't like revenue sharing in general, I am just curious why Edward Jones' revenue sharing agreements are somehow worse than all the rest? How many clients knew that Smith Barney owned Legg Mason? Almost every SB statement I see has some good old LM dogs in it. How about Blackrock and Merrill Lynch? Fortunately Blackrock is a decent fund company, but isn't it a conflict? What about Van Kampen? Owned by Morgan Stanley. They're ALL conflicts of interest. This industry is RIFE with conflicts of interest. But that doesn't mean those conflicts are acted upon. For example, I doubt that any LPL reps push their Preferred Funds because of the kickbacks. But the potential is there.LPL can have as many Revenue sharing agreements they want. I could care less. They don’t shove them down my throat. I can have any rep in my office…which I believe you can’t. The relationship I have with LPL is TOTALLY different than being a captive employee. I don’t go to regional meetings where the speaker is from the preferred list and only frm that list. I believe the conflict of interest is really over the top with Jones.
bspears:
Funny, I was at a Jones meeting this year and had a Columbia Funds Rep Presenting...NOT A PREFERRED FUND FAMILY, so the "only from that list" comment is just a lie! I am permitted to use most any family I see fit for my clients. I have never felt "pressured" to use a preferred family.LPL can have as many Revenue sharing agreements they want. I could care less. They don’t shove them down my throat. I can have any rep in my office…which I believe you can’t. The relationship I have with LPL is TOTALLY different than being a captive employee. I don’t go to regional meetings where the speaker is from the preferred list and only frm that list. I believe the conflict of interest is really over the top with Jones.
[quote=Hey Kool-Aid]
Funny, I was at a Jones meeting this year and had a Columbia Funds Rep Presenting...NOT A PREFERRED FUND FAMILY, so the "only from that list" comment is just a lie! I am permitted to use most any family I see fit for my clients. I have never felt "pressured" to use a preferred family. [/quote]Agree 100%
Off Topic: Would enjoy seeing a model portfolio of the best performing funds from each of the preferred companies for C share portfolio construction.
Spiff-
The Hartford non disclosure was the final straw for me. And then when I saw the ways that Jones made money, and they continued the propaganda train...that we were the only profit center...I realized I had to go, and I did. This week marks three years since I left, and for those that want to really be an entrpeneur or truly work for themselves, its the best fit.
I didn't care for the revenue sharing agreements, and as you have stated ad nauseum, everyone is doing it. LPL does it and it pisses me off, hell they would sell my name to anyone if they could make a buck off it.bspears:
I bought some John Hanc*** funds for a client a while back and got a call from their sales desk. They said they'd love to send us some info and get their local rep into my office. I didn't need it at the time, but I'm considering using their Lifestyle funds for some of my client and would love to have lunch with their rep to tell me more about them. As far as I know, that's not illegal at EDJ. I can't imagine the number of phone calls that I'd get if Jones just opened the doors up wide and didn't put any limits on who can and can't call unsolicited on us. As it is I've got about 25 vendors who want a piece of my time. I don't see them all, but they still call and tie up my BOA for a while. So, what you see as a limitation, I see as a benefit. I've never had one fund family shoved down my throat. Sure, we hear from the preferred funds at regional meetings, but nobody from Jones tells me that I have to use them or questions me when I don't. foot - I agree that the Hartford thing should have been handled differently. I have a problem, like B24 outlined, with proprietary funds, like Riversource, and that came too close for comfort. Even Jones said they liquidated their interest there because of the conflict of interest.LPL can have as many Revenue sharing agreements they want. I could care less. They don’t shove them down my throat. I can have any rep in my office…which I believe you can’t. The relationship I have with LPL is TOTALLY different than being a captive employee. I don’t go to regional meetings where the speaker is from the preferred list and only frm that list. I believe the conflict of interest is really over the top with Jones.