I actually disagree with you regarding online trading for clients.  I would rather they “play” the markets at some other firm.  I really like managing their serious money.  I think Jones is correct in keeping the IR protected.

What I'm talking is someone having a taxable account for online trading, not for letting people trade online in IRA's and suchlike.

For example, Vangaurd charges $35 for online trades via their online brokerage system. That makes it wholly unsuitable for any sort of rapid trading, but allows people to manage stocks as needed.

It's a relatively minor issue all in. The much bigger problem is as discussed, the complete lack of will about moving the compnay to a fee based platform and away from a transactional model.

This would also ween the company from all those fund kickbacks (which to be honest shouldn't be legal).

Did anyone see the EDJ ad, in this weeks TIME magazine? Any thoughts?

I didn’t see the ad in the magazine but I don’t think that the Top Producers should be giving up 1% of their commissions for the National Advertising Campaign.  If you take an EDJ top producer producing 500,000 to 1000000 they are paying $5000 to $10000 to fund the national advertising campaign.  They are sacrificing “for the good of the firm”.  They don’t even get to write this off their taxes.  Hello AMT!

[quote=spikedkoolaid]I didn’t see the ad in the magazine but I don’t
think that the Top Producers should be giving up 1% of their
commissions for the National Advertising Campaign.  If you take an
EDJ top producer producing 500,000 to 1000000 they are paying $5000 to
$10000 to fund the national advertising campaign.  They are
sacrificing “for the good of the firm”.  They don’t even get to
write this off their taxes.  Hello AMT![/quote]



Wouldn’t top producers be involved in the LP? If so they should
willingly contribute to things that improve the productivity of
non-competative EDJ’ers, thus giving more profits to the LP.

Well if you look at it that way, you are probably right on.  I just hated paying that 1% to IR’s who were failing miserably.

Not backing Jones or the policy, but since it is taken out prior to the producer receiving the income then ultimately it is not taxed and makes no difference that they can’t deduct it. 

At least I assume it would be taken out pretax, being that it would be stupid to take it out after taxes and I can see no reason Jones would want to do it that way.

FYI everyone, that 1% National Sales/Ads fee at EDJ is is capped at $250/month, regardless of how much you produce.  The MOST you pay is $3,000/yr.  So a $20K/mo. producer is paying $200/mo. 

Also, it is taken out of pre-tax commissions, not post-tax.

Anyone can argue the merits of National Advertising.  Bottom line is that it is there, and it does not amount to much.

[quote=Broker24]

Anyone can argue the merits of National Advertising.  Bottom line is that it is there, and it does not amount to much.

[quote=AllREIT]

[quote=Broker24]

Anyone can argue the merits of National Advertising.  Bottom line is that it is there, and it does not amount to much.

So. If I could expand your mental horizons a bit Mr. B24 and other Jones folks. You are an employee, and your employer is making you pay up to 3K for those great ads (some of them are hilarious), aka national branding.  Do you benefit from them?

Hard to quantify, but for the sake of argument, people get a good impression and  come by and buy a bond, or request a mutual fund. And when you sell them something, you get roughly 40 (after expenses) of the revenue. Which means the owners keep 60%. And if you are selling a mutual fund, the likelihood it isn't a rebating fund to the owners is less than 5%. And the owners benefit again.

So to summarize the owners make you pay for the advertising, keep more than half of the revenue you generate, and then make more through the back door. What a great deal for the owners!

Maybe some Jones IR's can make the case why the national ads are worth paying for. I just don't get it. And I was there for almost ten years....

Lets see , $250 a month for ten years at 8% is $45,000. Ouch.

[quote=footsoldier]So to summarize the owners make you pay for the advertising, keep more than half of the revenue you generate, and then make more through the back door. What a great deal for the owners! [/quote]

You do know about the Jones LP system. Long time EDJ'ers get to purchase interests in the EDJ LP.

[quote]Maybe some Jones IR's can make the case why the national ads are worth paying for. I just don't get it. And I was there for almost ten years.[/quote]

You don't think national advertising expense gets taken out at wirehouses? The reason indy pays so well is that you have so little corporate overhead.

Income interest only. The equity remains with the owners. Equity is where its at. Period.

Unless you are looking for income...

The reason indy pays so well is that you have so little corporate overhead.

You mean we aren't top heavy with useless men in suits who have long outlived their time and sit around leeching off the people who are currently working their butts off.  You mean we don't have endless and pointless meetings so some schmuck can try to justify the obscene money he (or rarely she) is making.  You mean we aren't thrown the bones and leavings from the GP's tables, because we get to keep the meal for our selves.

You guys are really bitter. I am not supporting or condemning national

advertising. Most firms have some and someone pays for it (either the

broker or the shareholder). To me, it’s not really a big deal. $250/mo. is

not going to have any impact on my overall financial picture (since you

have to be making about 10K net for the full amount to be taken out

anyway). Do I like paying it? No. But I don’t like paying my mortgage bill

or grocery bill either. It’s just there. If I don’t like it I will leave, as many

of you did. But I will not continually dwell on it. That’s what you guys

don’t get. I know EXACTLY what I am getting and paying for. It was all in

my agreements before I started. I haven’t really had any surprises.

[quote=Broker24]You guys are really bitter. I am not supporting or condemning national
advertising. Most firms have some and someone pays for it (either the
broker or the shareholder). [/quote]



No way, I think EDJ’s national advertising and core theme of
conservative investing is a good thing. You’re right that people like
to heap on EDJ. but still they do ok.

B24-

When you are out many years and 10net doesn't pay the real bills you probably will wonder where your money has gone.

When I hit 20K net (AFTER EXPENSES) on the indy side, it was very clear who was getting paid at Jones. And it was not me. 

Babs has made some very good points in previous posts noting the difference in the culture. No more giddy team leader meetings which basically is a teleconference on production or lack of it. And those dreadful regional meetings.

Hopefully as time goes on I will not appear as bitter. In the meantime I prefer to call it a reality check. For me the light went on about seven years in, and ulitmately I made a change for the better. It meant saying goodbye to some clients and recognition that those who came with me were really my clients and not those of EDJ.

I could never put a price on that experience. Gut wrenching, but worth every moment in hindsight.

[quote=Broker24]...  It's just there. If I don't like it I will leave, as many
of you did. But I will not continually dwell on it. That's what you guys
don't get. I know EXACTLY what I am getting and paying for. It was all in
my agreements before I started. I haven't really had any surprises.

[/quote]

I thought the exact same thing when I was at Jones.  I spent almost 5 years at Jones.  I could read my P&L at Jones literally from month 1, I could even understand that stupid allocation formula based on your gross.  However, it wasn't UNTIL I went Indy that I realized I did NOT know exactly what I was getting OR NOT getting. 

The biggest things were haircuts on annuity tickets (granted, I only sold two annuities while at Jones) and life insurance.  Jones claims to split ALL commission with you 60/40. Not true.  On insurance, they take some off the top, and THEN split 60/40.  That's just one example.

I also loved seeing that DCA worksheet that would print every quarter or so.  It showed the amount of dividends being reinvested, and then showed a "possible" amount and what that would mean to your bonus if all dividends were reinvested.  I always laughed at the math. It would show, for example, that a $100 credit to your P&L would mean $30 in profitability bonus if Jones was in the 30% bonus bracket.  That is NOT THE CASE.  The profitability bonus funnel is another way the GP's can water down your compensation and keep more for  themselves.  It could take a $100 profit and water it down to a $5 actual bonus.

I guess I am not being clear.  I realize that the ultimate payout being Indy is usually higher.  But everyone has to start somewhere, and it is usually not Indy.  What you get as far as overall payout (at EDJ) is not much different than other regional and wirehouse firms.  I am not arguing that the payout is higher going Indy vs. being an employee at a firm.  But they are two different business models.  It's like comparing being an owner/manager of a restaurant (hotel, store, etc.) versus being just the manager.  With both comes benefits and drawbacks.  You will usually make more when you also own the business, though sometimes not, and you have added responsibilities.

Here's the thing - if they didn't allocate certain expenses to the branch and the IR, someone has to pay for them (GP's and LP's).  So, this basically incents better producers.  The lower producers tend to cover more expenses as a percentage of their income.  I work closely with some very high producers in my region, and they have showed me their numbers.  Excluding taxes and personal elections (401k, insurance, etc.), their net payouts including bonus and profit sharing are north of 50%.  Now, at my level it is more like 42%.  And yes, I understand you have more tax deductions and all that, but again, it's not the same model.  But that begs the question, what firm does not have that model?  Every wire and regional I know of incents higher producers, and forces low producers up or out.  It's not rocket science.  It's just business.  But I think the mistake many people make on this forum is trying to compare EDJ to Indy models.  It's just not a true comparison.

As far as all the meetings or whatever, I think that falls in the same category as wirehouse branch managers (good vs. bad).  My particular region does not have many meetings.  I meet one evening a month for productivity meetings, which are pretty helpful since we basically hold a forum on what is working, not working, etc.  Twice yearly all-region meetings.  That's about it.  My region doesn't do some of the silly stuff that people harp about ont his forum.

Foot, I hear you loud and clear.  EDJ takes a lot of my dough.  And so would ML, SB, etc.  I would love to go Indy - I'm just not there yet.  In the meantime, I will use all my resources and build my business here.  If I feel that a few years down the road I would be better off Indy, I will certainly pursue that.  But I think the constant criticism of EDJ does a disservice to people looking for advice on joining different firms, since most of you former EDJ IR's admit that it was a good place for you to start.

But I think the mistake many people make on this forum is trying to compare EDJ to Indy models.  It's just not a true comparison.

You're right it isn't a true comparison. Unfortunately it is the hook that Jones uses to bring in unsuspecting brokers and new hires.  The illusion that you will be your own boss and run your own business.

See the inserted from the Jones site

As an Edward Jones investment representative, you're starting right at the top.

While some of these things are correct, they are not actual representations of reality.

That was my biggest beef with Jones.....they LIED to me.