Jones Pays
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77,000 views, huh? At least now I know what the GPs in St. Louis are doing all day…
(Portland, Ind.-AP) A former stock broker accused of bilking an elderly woman and her son out of $279,000 has been convicted of 13 counts of theft. 42-year-old Greg Reinhold was convicted yesterday following a three-day bench trial held in north-central Indiana's Jay Superior Court.
http://www.wane.com/global/story.asp?s=3065388&ClientTyp e=Printable
3/8/2005 8:29:41 PM
For the 12th consecutive year, Edward Jones ranked number one in Registered Representative magazine’s annual survey of the nation’s seven largest financial services firms. The magazine randomly selects brokers nationwide and asks them to rank their firms in various categories. “This ranking is formed by the opinions of our investment representatives, the people who meet with clients every day,” said Kent Borsch, the local Edward Jones investment representative. “That makes it a good measure of how well we are serving our clients, which gives this ranking even greater significance.” Borsch said that he is particularly proud of the number one ranking because of the number of years Edward Jones has achieved this honor. “Twelve years is no coincidence,” Borsch said. “We are doing things differently at Edward Jones, and we are proud of that distinction.”
"He who wispers down a well about what he has to sell, will never make as many dollars as he who climbs a tree and hollars"
Other 2005 Alumni Fellows were:
Joe W. Gray, a 1972 graduate, representing the College of Arts and Sciences, who is an associate laboratory director for Bioscience and Life Sciences Division and is director of Berkeley National Laboratory, Berkeley, Calif.
Douglas E. Hill, a 1968 graduate representing the College of Business Administration, who is managing partner of Edward Jones, St. Louis, Mo.
http://www.wgtndailynews.com/articles/2005/03/18/news/news2. txt
Honorable men all!
GP's are just milking the hard workign IR who has to cover for the misstrust the GP's have brought to the Firm.
When all is said and done, any IR that can produce 250K plus @38% Jones Payout, would be far better off to go Indy. Simple math is what it is......Look at your Numbers......Freedom is something you don't really understand until you have it !
I have yet to talk to an ex-Jonser who isn't happier being Indy, why would that be ? F R E E D O M & O W N E R S H I P
Not Fake Unfunded so-called LP, who controls that, if they invite you in, they can kick you out ! DO THE MATH............
JoeDabrkr,
Not really....... You would have to have been or be there to understand, the Kool Aid is so strong, it's hard not to Drink..
Most Middle Managers do not own anything including their own car, at Jones GP's are the chosen ones, that lead you on to become one yourself, it is more like a religion, some have compared it to a Amway experience....I wouldn't know about that, but perhaps you do ?
The point is the GP's didn't take care of their Fiduciary Duties to be honest with their IR's & clients and LP's to prove this point, Jones is currently paying LP's new and old that got offered a LP, the Interest Earnings on the LP, even though there has been no purchase, how can you get something for " ZERO " ? Only at Jones, oh, that sounds like the sweet heart deals they had with the Fund Families, doesn't it, "WE DIDN'T DO ANYTHING WRONG" according to "3" MIL HILL ?
There are 75 Million reasons not to Trust what they are saying, anyone heard of California Dreaming
Hopefully the IR's wil continue to leave until the GP's strart treating them like real Partners and start being HONEST WITH THEM for a change....like in the gold old days when the Edward Jones could be trusted from the TOP to the BOTTOM...THOSE WERE THE DAYS MY FRIEND......................................
That way, investors will have at least a chance of figuring out if the broker's selling, say, Putnam funds because they're just so darn good (they're not) or because Putnam's paying the brokerage a lot of money.
Putnam funds tend to be lackluster, and last year, the company agreed to pay $110 million to settle charges connected to the mutual fund market-timing scandal - a separate issue, but one that suggests Putnam may not always put the interests of its customers first.
Nonetheless, it's on Edward Jones' preferred list. Maybe that's because it paid Edward Jones more than $10 million last year to get on the list, according to the Jones Web site, edwardjones.com. (Click on "revenue sharing" for more information.)
http://www.northjersey.com/page.php?qstr=eXJpcnk3ZjczN2Y3dnF lZUVFeXk2MzcmZmdiZWw3Zjd2cWVlRUV5eTY2Njk1NDYmeXJpcnk3ZjcxN2Y 3dnFlZUVFeXky
Since this column has so many views I thought it would be appropriate to print the following: This is an actual suggestion wire response. Mutual Fund Shares: Question: I understand our stance on A Shares being long term. blah,blah,blah. I would like to hear from someone as to the circumstances when all of the other shares are prudent. I understand B Shares. But it doesn’t stop there. Putnam has C, M; some firms have an F and who knows what else. Can you give us an example of when/why to use C,M,F,etc. Thanks. RESPONSE: Most of the investor decisions on fund pricing are a case of choice and we offer all share prices because there is this flexibility. Our preference for A shares is based on the way we feel our clients should own funds. But the wide variety of classes certainly shows that there are many ways for clients to decide how much and when to pay. 1. A Shares – best for long-term investors who also intend to grow their investments over time. Lower commissions from breakpoints and rights of accumulation, plus visibility of sales charges,are advantages. 2. B Shares–best for long term investors who cannot benefit from breakpoints and do not want commissions taken out intial investment. Lower commission on trades under $100m is positive. No rights of accumulation no breakpoints, and confusion over how much is paid &when are negatives. 3. C Shares-- best for the short term investors who cannot afford to move in and out of funds with other pricing structures. Since our sole focus on fund investing is long term, this is probably the most disadvantageous for our customers due to the never ending charge of high on-going fees. 4. M Shares–fall somewhere in the middle. Lower front-end sales charge is advantageous over A and B. Higher on-going fees hurt when compared to A & B, but are not as high as C Shares. Appropriate for customers who financially or philosophically fall between the two extremes. As you can see, there is not a clear-cut answer. The Jones position favors A shares because:1) the bulk of our customers are long-term investors who will accumulate large positions over time,2) the belief that full and open disclosure of pricing is the best practice for ourselves and our customers over time, and 3) our belief that the firm should take a stand on such issues when we see risk. Tom Miltenberger/ Mutual Fund Sales/ Edward Jones Investments
And here is what Tom didn't say:
"and, we would like to get as much money as possible today. Because, you might get smart and choose to go indy tomorrow, and therefore take a higher ongoing revenue stream with you. As partners, we're all very greedy and shortsighted by nature, and we want all of our money right now--today. Besides, one of our new trainees may call us tomorrow with a great 30-year 5.40% bond idea, and I'll need to have the money available today. I wouldn't want such an opportunity to pass me by."
The Securities and Exchange Commission announced the separate settlements Wednesday with Citigroup, the biggest U.S. financial institution, and Putnam, the seventh-largest mutual fund company.
Citigroup and Putnam, a unit of Marsh & McLennan Cos., neither admitted nor denied wrongdoing.
The SEC alleged also that Citigroup sold a type of mutual fund shares known as Class B shares to certain large-scale customers who could have earned a higher return from another type of shares.
In a related move, the National Association of Securities Dealers disclosed that Citigroup, American Express Financial Advisors Inc. and JPMorgan Chase & Co. had agreed to pay a total $21.25 million for alleged violations in sales of mutual funds.
The NASD, which is the brokerage industry's self-policing organization, fined Citigroup $6.25 million, American Express Financial Advisors $13 million and JPMorgan Chase $2 million.
The investment firms, which also were censured by the NASD, neither admitted nor denied wrongdoing. They agreed to set up plans to correct deficiencies for some 50,000 households that had invested in the fund shares.
The regulators' moves were the latest enforcement actions over alleged abuses in the trading and marketing of mutual funds in an industrywide crackdown that began in September 2003.
"We hope securities industry professionals have by now received the message that they must fully inform their customers of the nature and extent of any conflicts of interest that may affect their recommendations," SEC Enforcement Director Stephen Cutler said.
In December, the SEC ordered Edward Jones, based in Des Peres, Mo., to pay a fine of $75 million for failing to disclose to customers that it had so-called revenue-sharing arrangements with seven mutual fund companies.
The $40 million that Boston-based Putnam is paying will go into the affected mutual funds, the SEC said. For Citigroup and Putnam, what is at issue are so-called "shelf space" arrangements between fund companies and brokerage firms, under which the funds pay brokers for slots on lists of recommended buys for customers. The practice appears widespread in the securities industry, regulators have said.
Citigroup failed to fully disclose to its Smith Barney retail customers that 75 fund complexes made payments for "shelf space," the SEC alleged. In fact, it said, the company offered for sale only the funds of the complexes that made the incentive payments.
Similarly, Putnam had such arrangements with more than 80 brokerage firms from 2000 through 2003 but did not adequately disclose the potential conflict of interest to Putnam's board or shareholders, the SEC said.
Putnam was the first investment firm formally accused of abuses in the fund industry scandal. In April 2004, it agreed to pay $110 million to settle allegations by federal and Massachusetts regulators of allowing improper market timing - rapid in-and-out trades - by favored clients to the detriment of long-term shareholders. Earlier this month, Putnam agreed to pay an additional $83.5 million to current and former fund shareholders to resolve the allegations, the result of new calculations by a Harvard business professor hired to tally investor losses from trading abuses.
The SEC alleged that Citigroup also recommended and sold, through Smith Barney, so-called Class B mutual fund shares to certain large-scale customers who generally would have received a higher rate of return had they bought Class A shares - allowing them discounts on sales charges for investments of $50,000 or more.
That wasn't properly disclosed to customers, and Citigroup reaped heftier commissions from sales of the Class B shares than it would have earned from selling Class A shares of the same funds, the SEC said.
Typically, investors in Class B fund shares don't pay an upfront sales commission when they make a purchase, but often pay higher fees and a commission when they sell the shares. Class B shares have been criticized because some investors purchase them on the incorrect belief that they are commission-free.
The NASD's cases against Citigroup, American Express Financial Advisors and JPMorgan Chase involved similar allegations related to sales of different classes of fund shares.
NASD said the three companies "did not consistently consider that large investments in Class A shares of mutual funds entitle customers to ... discounts on sales charges, generally beginning at the $50,000 investment level, which are not available for investments in other share classes."
In trading Wednesday, shares of Citigroup rose a penny to close at $44.45, while shares of Marsh & McLennan rose 43 cents to close at $30.23. Shares of American Express Co., which plans to spin off the American Express Financial Advisors brokerage, lost 76 cents to close at $50.42, and shares of JPMorgan Chase fell 13 cents to close at $34.93. So if a big organization such as Smith Barney only paid $6.25 million for failing to disclose their conflict of interest (payments for shelf space) why did EJ settle for $75 million??????
The act for which Edward Jones was punished was not their little kickback scheme. Jones was hit for that little letter in various and sundry publications claiming moral superiority and making the SEC and NASD look bad by inferring that they didn't know how to do their job, and that they should take a leaf from the Edward D. Jones & Co. book.
At long last, Bachmann and Hill started to publicly believe their own press, and that is what led to the investigations.
By AMANDA BRONSTAD
Los Angeles Business Journal Staff
Attorney General Bill Lockyer has sued American Funds’ distribution division for failing to inform investors about $426 million in “revenue sharing” payments to dozens of brokers who recommended its products.
“American Funds dressed up these arrangements with fancy names like ‘execution revenue,’ ‘target commissions’ or ‘broker partnership payments,’” Lockyer said in a press release. “But when you look beneath the cloak of legitimacy, the payments are little more than kickbacks to buy preferential treatment. Investors deserve to know that.”
American Funds is a unit of the Capital Group Cos., based in Los Angeles. Lockyer also sued another subsidiary, Capital Research and Management Co., the investment manager for American Funds.
The case seeks profits obtained through the practice, plus $25,000 per violation of the state’s corporate securities laws. Under those laws, American Funds failed to inform consumers about the payments or the company’s preferential treatments.
Lockyer said the payments, which began in January 2000, represent a broader problem in the mutual fund industry.
He said he “brings this action in response to an industry-wide mutual fund practice involving mostly oral, undisclosed agreements between mutual fund complexes and certain securities broker-dealers who sell fund shares to investors,” according to the suit, filed in Los Angeles Superior Court.
American Funds, which has 29 separate mutual funds with total assets of $600 million and 20 million shareholders, is also the target of a probe by the NASD (formerly the National Association of Securities Dealers), which alleges its distribution unit gave $100 million in commissions from 2001 to 2003 to brokerage firms that sold its mutual funds. The Securities and Exchange Commission is investigating the company’s practices as well.
I'll bet "Revenue Sharing" began when Mutual Fund commissions fell from 8.75% to 5.75%. They just shuffled the 3% from visable commission to invisable. Oh, the customer continues paying through higher fund management (marketing) expenses, but advisors were cut out of the split.
Jonestown, I am disappointed in you! This deserves its own thread. And while you are at it, go to their webiste (American) and pull up their lawsuit aganist Lockyer. Good reading. Maybe he attacked the wrong firm this time.
You are also clueless on your comment on management fees. American has cut theirs twice in the past 12 months. Did any of your fund companies do that? Or have you lowered your wrap fees as your practice got bigger?
Guest-
At least now I know that your MO is to defend at all costs. You have been around too long not to see that there are improvements that can or should be made to EDJ. I would like to think nothing has changed regarding the beloved culture when it comes to new ideas. We used to embrace them when were riding the wave. Now that were bouncing in and out of the surf, things are little more difficult for everyone.
Don't lose sight of what made this company unique. Maybe, just maybe we can get it back. I am hoping so even in my darkest moments....
Jonestown, Ya got me. Guess I am done selling.
7yr, read my post! I was not defending at all costs. If you take the time to read the news, Capital sued Lockyer BEFORE he filed suit aganist them! Sounds like a pissing contest to me. Capitals actions are good for us all, not just Jones. There are improvements to bemade at all companies, not just Jones. Are you having a difficult time with all that is going on? If you are, I am sorry to hear that. But, don't blame Jones for it.
Jonestown, funny, seemed he was at Jones the least and yet you made a point to copy it. 2 yrs at Jones, what happened? Goals then he was gone? Did he even have an office? Who Cares!
Where do you clear your trades Jonestown? I am not sure I have ever seen you post
By the tone of your reply I would have to surmise that you failed anger management classes.
I blame Jones for the double-speak. For fudging the truth. For not being everything I was hoping for in a B/D. Having been here for 7 years and in the insurance world (their time in the regualtory limelight is coming) I still feel that I have the better deal. Am I concerned about getting LP, or helping any further in the region, well...that is now way down on the list of priorities now.
BTW I too am glad that someone is taking on the regulators and Lockyer. Admitting no wrongdoing and writing a check for 75M was a bitter pill to swallow if we really did nothing wrong, which I doubt. Capital Guardian ought to have enough dough to take them on. The sooner this is all over the better.
7yr, not looking for a fight with anyone, let alone a Jones guy. You just failed to comprehend the post you commented on. Capital needs to start somethong here, Lockyer is running amuck and Capital is the ONLY one to stand up to him. No financial firm has ever survived a indictment (Lances words) so, we had to settle. You came to jones from the insurance world? Business is very good for us right now, my office included. You seemed to want to blame Jones or the current situation for your business, not right. I is up to you. As a BD Jones has given me all I would ever expect. I am sure you are also a bit better off than the insurance world… As for the LP, it is nice. Folks call it a bond in drag but it is the best 15% check I get every month!