Revenue Sharing
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"Maxstud is now using analogies with meteors, comets, lightning, things
dropping from the sky. Holy sh*t, he’s about to go GP on me, and start
quoting the bible and different psalms to back up the Jones position."
Thats funny.
It IS pure profit for the "firm" (GP's).
While it might be legal accounting to post it the way they do (Of course I understand accounting), it's additional revenue that's generated without any true cost to obtain that revenue. It's hard dollars paid for shelf space--nothing more.
Okay, let me get this straight. Jones spends far more than $207 million per year on paper, ink, envelopes, extra postage, and a team of lawyers to continue revenue sharing in its present form. If revenue sharing dried up, these expenses and then some would go away completely; therefore having no material effect on Jones’ overall operating income. Got it. Thanks for the clarification.
[quote=Soothsayer]Okay, let me get this straight. Jones spends far more than $207 million per year on paper, ink, envelopes, extra postage, and a team of lawyers to continue revenue sharing in its present form. If revenue sharing dried up, these expenses and then some would go away completely; therefore having no material effect on Jones’ overall operating income. Got it. Thanks for the clarification.[/quote]
Yea, have to agree that doesn’t make much sense. Who would want to keep a revenue stream that is eaten up be the cost to maintain it.
[quote=zacko]
It IS pure profit for the “firm” (GP’s).
While it might be legal accounting to post it the way they do (Of course I understand accounting), it's additional revenue that's generated without any true cost to obtain that revenue. It's hard dollars paid for shelf space--nothing more.
[/quote]When I was in college I started working for an electronics retailer, right around the time Directv was just starting and we were selling the RCA dish for something like $500. At that time Directv had an agreement with the retailer that they would pay residual payments forever for every customer we sold a dish to and signed up to Directv, as long as the customer kept the service. Is that money pure profit to the owner of the electronics store? Or does he use it to grow his business, help with raising expenses, and cover other costs? If the residual payments are 5% of his revenue doesnt that mean its around 5% of his profits? If all the customers cancelled their service doesnt that mean he loses 5% of his revenue and 5% of the profit? Does that mean he needs to cut costs by 5%?
[quote=jonesescapee]I think we need a group hug[/quote]
Is that a banana in your pocket?
[quote=Maxstud] [quote=jonesescapee]I think we need a group hug[/quote]
Is that a banana in your pocket?
[/quote]
its a flashlight
[quote=rankstocks]What about Raymond James? How much profit is derived from ticket charges? This whole thread is rediculous. You should know better Zacko. I now think much less of you.[/quote]
Wow, Zacko...how can you live with yourself?!! The King of Kool-Aid doesn't LIKE you!!!
Whew...3 pages ago I posted something about accounting and caused the sky to fall...Look I don't really give a darn about Revenue sharing. I don't really care about EJ at all, but it is laughable to say that Revenue sharing is 60 or 90 percent of Income because you could just as easily say that Mutual Fund sales are 400% of income or that the brokerage brings in 200% of income...By that logic, the owner would owe someone money instead of making anything...It just couldn't work that way.
In the interest of being fair, I read the one reply that seemed to make a case, but it, too, says that EJ gets revenues from these sources. Revenues don't equal profit in my book. If you disagree, that is fine...No sweat off my back and I don't take it personally.
[quote=Incredible Hulk]If the EDJ GPs are only concerned about lining their pockets as you say, then we will have wrap accounts very shortly. If/When we do have wrap accounts, you will tell us that it is only for them to make more money, while you tell us now that wrap accounts are good for the clients. I look forward to the day when this is the topic of debate...[/quote]
Mr. Hulk (the real one) I think the more interesting topic of debate would be why Jones changed it's position on WRAP accounts. Another Jones IR posted that he thought Weddle would bring about WRAP accounts soon, and that there were rumblings about the possibility. What do you think about that?
[quote=zacko]
It IS pure profit for the "firm" (GP's).
While it might be legal accounting to post it the way they do (Of course I understand accounting), it's additional revenue that's generated without any true cost to obtain that revenue. It's hard dollars paid for shelf space--nothing more.
[/quote]
Zacko-
Here's an interesting point also- What does ENRON and EDWARD JONES have in common?
ANSWER: THEIR ACCOUNTING FIRM- who remembers that up until about 3 years ago Arthur Anderson was Edward Jones accounting firm. AND BYTHEWAY- Arthur Anderson FIRED EDJ not the other way around- it happened right about the same time EDJ was served with notice to start turning over documents about Revenue Sharing.
Coincidence- I think not.
Hmmm,
It's hard dollars paid for shelf space--nothing more. Now tell me how that differs from my local grocery store.
I guess one difference is that they take off the top as well. Split the reduced commission with the revenue generators, and make them feel like your giving more than they should.
[quote=Maxstud] [quote=Maxstud]
Revenue Sharing is not really earned income therefore it is not used to cover any type of overhead expense? Pretty weak statement. None of it goes to cover employee salaries, building maintenance, LP payout ect ect?
Simple formula Revenue - Expenses = Income, it doesnt matter if the salesperson directly creates the revenue or if its paid by a company to do business with another company
[/quote]
I'll try by reposted the above quote.
Good luck
[/quote]
MAX- Glad you love hearing from me. But since this is such a simple formula for you, can you please tell me the answer to this:
If Revenue Sharing goes into the STL "Pot" so to speak, then expenses are deducted, why does the Investment Representative make only 40% of Gross Commission Generated each month?
If you were running a company with 9000+/- offices, and each one generated NEW commissions each month, wouldn't you make sure the overhead was covered out of THAT MONEY FIRST? Of course you would. And the General Partners have. AND please keep in mind, that every good Jones Broker volunteers time to train new brokers. NO MONEY paid for that.
Don't get me wrong, the formula is pure GENIOUS. But Revenue Sharing is PURE PROFIT. Overhead is paid out of the monthly commissions earned by each IR in the field.
[quote=munytalks][quote=Maxstud] [quote=Maxstud]
Revenue Sharing is not really earned income therefore it is not used to cover any type of overhead expense? Pretty weak statement. None of it goes to cover employee salaries, building maintenance, LP payout ect ect?
Simple formula Revenue - Expenses = Income, it doesnt matter if the salesperson directly creates the revenue or if its paid by a company to do business with another company
[/quote]
I'll try by reposted the above quote.
Good luck
[/quote]
MAX- Glad you love hearing from me. But since this is such a simple formula for you, can you please tell me the answer to this:
If Revenue Sharing goes into the STL "Pot" so to speak, then expenses are deducted, why does the Investment Representative make only 40% of Gross Commission Generated each month?
If you were running a company with 9000+/- offices, and each one generated NEW commissions each month, wouldn't you make sure the overhead was covered out of THAT MONEY FIRST? Of course you would. And the General Partners have. AND please keep in mind, that every good Jones Broker volunteers time to train new brokers. NO MONEY paid for that.
Don't get me wrong, the formula is pure GENIOUS. But Revenue Sharing is PURE PROFIT. Overhead is paid out of the monthly commissions earned by each IR in the field.
[/quote]Wow this got to be the most pointless argument yet. It doesnt matter where you allocate whatever revenue source it is all just one big pile of money!!! So back to my one and only point...Revenue Sharing is not 50% of EDJ income it is 5% of the revenue. That is all.
BTW your Auther Anderson post is very funny.
[quote=footsoldier]
Hmmm,
It's hard dollars paid for shelf space--nothing more. Now tell me how that differs from my local grocery store.
[/quote]
There isn't somebody standing in the grocery store isles pitching one product over another.
The grocery store doesn't call you at home an offer products to you that have paid for shelf space.
The store itself or the store employees have no interest in whether you buy the product or not.
If everyone chooses not to buy the product placed on the higher shelves and buy a box of cereal at ankle height because it tastes better, the store will no longer stock the high shelf item and offer the ankle height cereal company the opportunity to pay for shelf space.
[quote=munytalks][quote=Maxstud] [quote=Maxstud]
Revenue Sharing is not really earned income therefore it is not used to cover any type of overhead expense? Pretty weak statement. None of it goes to cover employee salaries, building maintenance, LP payout ect ect?
Simple formula Revenue - Expenses = Income, it doesnt matter if the salesperson directly creates the revenue or if its paid by a company to do business with another company
[/quote]
I'll try by reposted the above quote.
Good luck
[/quote]
MAX- Glad you love hearing from me. But since this is such a simple formula for you, can you please tell me the answer to this:
If Revenue Sharing goes into the STL "Pot" so to speak, then expenses are deducted, why does the Investment Representative make only 40% of Gross Commission Generated each month?
If you were running a company with 9000+/- offices, and each one generated NEW commissions each month, wouldn't you make sure the overhead was covered out of THAT MONEY FIRST? Of course you would. And the General Partners have. AND please keep in mind, that every good Jones Broker volunteers time to train new brokers. NO MONEY paid for that.
Don't get me wrong, the formula is pure GENIOUS. But Revenue Sharing is PURE PROFIT. Overhead is paid out of the monthly commissions earned by each IR in the field.
[/quote]Golden Rule- He who has the gold makes the rules. Didnt they tell you your split when you were hired? Or did you forget to ask?
Max-
It is obvious you do not have an argument anymore. You did not answer the question, you are merely trying to deflect away from the point and further, do what all Jonesers do when they realize they are wrong, try to insinuate another person is less intelligent than yourself.
Glad you also liked the Arthur Anderson fact. Since you find it humorous, you must not have been around when it occurred. It is fact.
When asked, in a SUGGBOX wire to Bachmann, why EDJ would keep AA during such negative publicity about them, Bachmann replied that EDJ had a long standing relationship with them and would not abandon them during this time. You can look this up in the Records Department, but I doubt you will.
And you would have had to be on Leadership Team to be aware of when AA requested a termination of their agreement with Jones-and how this should be explained back out to the troops. Obviously, you weren't on Leadership Teams either.
Now, either get back on the phone or pack your bags- isn't this pretty close to Holy Week time when you all gather together to reassure yourselves that you are doing what is right? And get the update on Growth Numbers. Don't forget to pack your green name badge, you KNOW how they hate it when they can't identify you right away.
Golden Rule- He who has the gold makes the rules. Didnt they tell you your split when you were hired? Or did you forget to ask?
I thought the Golden Rule was: do unto others as you would have them do unto you?
I think the thing that's got most folks' panties in a bunch (mine included) is not the fact that Jones has/did/does revenue sharing. It's the fact that they
a) settled for $75mil and THEN issued the swift kick in the balls to their working force by letting it hit the papers FIRST, THEN issuing a mild wire saying.."ok there might be some negative publicity right now"
b) allowed us to work our *sses off explaining away revenue sharing by telling people, "everybody does it, WE just settled so WE would appear to bewilling to work on this"
c) then delivered yet another blow by waiting two weeks to tell the "best darn salesforce in the world" that a part of the settlement REQUIRED DH to step down as managing partner.
d) then CONTINUES to villify other firms, by continuing to tout that we only offer 7 preferred fund families, with a proven track record of success.
The halo started to slip for me at that point.....I know I know, I'm just a Sales Assistant (or BOA - whatever) but I marched in line with everybody else, took my share of ranting and raving phone calls so my rep could get some work done, volunteered, supported, cheered etc.
PS - before there’s any cracks about my double references to male genitalia, I’m an USAF wife, I’ve got a set of my own.