So long, mr weddle
149 RepliesJump to last post
I’ve got one fundamental question about implementing a fee-based program at Jones and it’s frankly the reason I never expected to see such a program at Jones. How do you run a fee-based program, which encourages activity to justify the fee, in a firm who’s mantra is buy and hold?
I hear you, but is here is what is being said: the client will sign a form stating exactly what activities to expect. This will be annual reviews, quarterly rebalancing, and things related to planning tools like personal financial statements and specific goals, etc.
the math of it means it will not be used by newbies. but the guy with a large book can triple his trails from 25 to 75 bps gross. (30M AUM in fees= 2 trips per year all over the world). spikedlookaid is right about the continued over-use of liquidate/transfer.[quote=newnew]yeah, just a trigger. might’ve stayed had this happened already, but I agree they will underprice it–that is what I have heard (75 bps or so gross). Maxstud got the scoop?[/quote]
No, I told you everything I have heard.
I’m all for a fee based option but is funny that you hear people say fee based is better for the client because now the advisor is on the same side of the table as the client. Then you hear [quote=Indyone]How do you run a fee-based program, which encourages
activity to justify the fee, in a firm who’s mantra is buy and
hold?[/quote].
I think it boils down to the fact that most people are told that a fee based advisor is in their best interest, most news articles I read encourage that idea. I believe the way to survive in the early years is a combination of fee based and commission based. If you have a 401(k) rollover you could offer a commissioned based account, if you have someone who owns some mutual funds that they would like to keep then offer fee based. Isn’t that what is in the best interest of the client, or am I naive?
I have always been a buy and hold investor, even before I was in this business, I also have always rebalanced on a yearly basis. Just because I don’t believe I can time the market doesn’t mean that a different investment might come along every once in while that I would want to add to a portfolio or an investment that I have held for a while doesn’t match what I am doing currently. I think fee based accounts will allow me to make these decisions for my clients with out worrying about the commission they would have to pay.
What I’m trying to say is this:
You get the opportunity to transfer an account that has some mutual funds in it like T Rowe Price, High Mark Large Cap Value, Julius Baer International, Metropolitan West Bond, etc. You tell the client, "Yeah, let's liquidate those funds and bring them over here and put them in our American Funds (65% Net Revenue) and sprinkle in some VanKampen. We'll get rid of that bond fund because Bond Funds are bad, you really want 3- 30 year individual bonds that pay a fixed amount of interest and pay me 2.5 Net." What I'm trying to say is when EDJ limits the amount of funds in the program and limits the pricing and limits the flexibilty it really ties your hands to liquidate and transfer good funds and put them in yours. An example I give you is last month, I transferred a Schwab fee based account. I did an analysis of the portfolio and the mutual funds that were used. It was a great portfolio. I didn't sell a thing. I even kept the fee the same as what was at Schwab. The client was happy, I did what was right, and no tax consequences. By the way, all of the cost basis transferred as well. Unlike when I used to work at Jones and tell people, you need to go ask your former broker for cost basis.[quote=spikedkoolaid]I even kept the fee the same as what was at Schwab. The client was happy, I did what was right, and no tax consequences.
[/quote]
Wow! I can call you for advice and I don’t pay anything more for advice??? That’s great! I’m buying, but you know what they say about free advice…
No he said he didn’t change anything. They’re just going to pay the fee to him now, not Schwab.
I don't think Jones will ever make a blanket statement that says fee based is better or commission is better. I think they will encourage us to offer both platforms to clients and let them choose which is better. The problem I have with most wrap accounts is that you pay the fee simply for the ability to buy any kind of fund from any family. Rarely do prospects tell me they have review requirements like I believe Jones will implement. I have clients who just want me to roll over their 401k or make better investments for them one time. They don't want to hassle with the planning side of my biz. Those are perfect for commission based accounts. The ones that want to work through the planning process and want the extra attention (and subsequent changes in the account) will be offered the fee based account. It will be an interesting transition, but I think it will definitely be worth it in the long run. I wouldn't be suprised if the fee comes out to be north of 1%. Our MAP account is over 2% @ $500K. I can also see a tiered approach. Something like 1.5% for the first $250K, 1% next $250K, .75% everything else. That's the way the MAP is priced. Maybe they'll adopt something like that. Who knows. It's too soon to make any serious guesses.[quote=Spaceman Spiff] No he said he didn’t change anything. They’re just going to pay the fee to him now, not Schwab.
Spiff - yeah - I said advice didn’t cost anything MORE! He wasn’t getting advice from Schwab. Now, he’s getting advice and he’s paying the same fee. The only reason it ticks me off is that Spiked is probably a really conscientious rep who will give good service, but has devalued himself and others in the industry by telling the client that advice is cheap.
If all you’re paying for is the labor & materials for your house, why would you ever pay an architect? Could it be because they’re required to have those darn drawings - and if you make a material change to the plan for the house you have to go back and get the architect to sign off on the change.
[quote=Spaceman Spiff]
I don't think Jones will ever make a blanket statement that says fee based is better or commission is better. I think they will encourage us to offer both platforms to clients and let them choose which is better. First of all Spiff, Jones already has made the statement that commission is better for everyone...they've been saying it for years. The problem I have with most wrap accounts is that you pay the fee simply for the ability to buy any kind of fund from any family. Rarely do prospects tell me they have review requirements like I believe Jones will implement. I have clients who just want me to roll over their 401k or make better investments for them one time. They don't want to hassle with the planning side of my biz. Those are perfect for commission based accounts. The ones that want to work through the planning process and want the extra attention (and subsequent changes in the account) will be offered the fee based account. It will be an interesting transition, but I think it will definitely be worth it in the long run. They don't want to hassle with the planning side of your business? I hate to point out the obvious to you, but you don't have a planning side to your business. I wouldn't be suprised if the fee comes out to be north of 1%. Our MAP account is over 2% @ $500K. I can also see a tiered approach. Something like 1.5% for the first $250K, 1% next $250K, .75% everything else. That's the way the MAP is priced. Maybe they'll adopt something like that. Who knows. It's too soon to make any serious guesses. [/quote][quote=Philo Kvetch][quote=Spaceman Spiff]
I don't think Jones will ever make a blanket statement that says fee based is better or commission is better. I think they will encourage us to offer both platforms to clients and let them choose which is better. First of all Spiff, Jones already has made the statement that commission is better for everyone...they've been saying it for years. - And for years the demographic was the same. Now, with the millions of baby boomer hitting retirement age, the rules are changing. Weddle himself told our region a couple meeting ago that he believed that commission based was best while accumulating assets and fee based was best when spending your assets. The problem I have with most wrap accounts is that you pay the fee simply for the ability to buy any kind of fund from any family. Rarely do prospects tell me they have review requirements like I believe Jones will implement. I have clients who just want me to roll over their 401k or make better investments for them one time. They don't want to hassle with the planning side of my biz. Those are perfect for commission based accounts. The ones that want to work through the planning process and want the extra attention (and subsequent changes in the account) will be offered the fee based account. It will be an interesting transition, but I think it will definitely be worth it in the long run. They don't want to hassle with the planning side of your business? I hate to point out the obvious to you, but you don't have a planning side to your business. - Yes, I do. We didn't used to, but we do now. It's every bit as solid as everyone else. Especially for the people who have embraced it. I wouldn't be suprised if the fee comes out to be north of 1%. Our MAP account is over 2% @ $500K. I can also see a tiered approach. Something like 1.5% for the first $250K, 1% next $250K, .75% everything else. That's the way the MAP is priced. Maybe they'll adopt something like that. Who knows. It's too soon to make any serious guesses. [/quote] [/quote]Spiff, with all due respect, until you’re able to look at Jones as others see it you never will be able to understand how wrong you really are.
hey spiffy,
".............one time at band camp" have some more koolaid and think of all the nice trips you'll take with Maritz. You know the best darn travel agency with a few GPs on the board.LOL, wow right in a row the usual suspects with nothing new to say, Philo, bspears, foot and jerk. Maybe I should have waiting for CIB revenue sharing post before I posted so it would have been the 5 of you.
Maybe you guys should set up a conference call, all crack open a beer and share your EDJ horror story, sounds like good times to me!
Max, I don't have any connection with Jones other than being a curious bystander. That said, why the hostility and ad hominem attacks? Do you have issues with people telling their opinions? Or is your problem that these folks with "Edward Jones horror stories", as you so quaintly put it, are hitting a little too close to home? In any event, I haven't seen anything by you that shows any of the points made by any of "the 5" to be untrue.LOL, wow right in a row the usual suspects with nothing new to say, Philo, bspears, foot and jerk. Maybe I should have waiting for CIB revenue sharing post before I posted so it would have been the 5 of you.
Maybe you guys should set up a conference call, all crack open a beer and share your EDJ horror story, sounds like good times to me!
Redundant, redundant, and redundant. No new information. Same drone, kool aid, you dont know what you dont no come backs, GP’s this GP’s that. It’s all been said before.
No they’re not hitting to close to home, they have been saying it for 2 years now if it was going to hit home it would have already.
"In any event, I haven’t seen anything by you that shows any of the points made by any of “the 5” to be untrue."
I have no reason to discuss these points with these guys, it’s like going to the Democratic convention to discuss how great a job G.W. Bush is doing.
"Spiff, with all due respect, until you’re able to look at Jones as
others see it you never will be able to understand how wrong you really
are."
The only people that matter is the clients that work with Jones, I sure don’t care what some indy guy or Merrill guy thinks about how we run our business. Laugh and joke all you want, I’m not in the biz to impress people who will never do business with me.
I'm not laughing or joking. As I've posted before, if you guys are happy with it, I'm happy for you, but your lip service changes nothing. I suppose that's as good as you can do Max, given what you have to work with.Redundant, redundant, and redundant. No new information. Same drone, kool aid, you dont know what you dont no come backs, GP’s this GP’s that. It’s all been said before.
No they’re not hitting to close to home, they have been saying it for 2 years now if it was going to hit home it would have already.
“In any event, I haven’t seen anything by you that shows any of the points made by any of “the 5” to be untrue.”
I have no reason to discuss these points with these guys, it’s like going to the Democratic convention to discuss how great a job G.W. Bush is doing.
“Spiff, with all due respect, until you’re able to look at Jones as others see it you never will be able to understand how wrong you really are.”
The only people that matter is the clients that work with Jones, I sure don’t care what some indy guy or Merrill guy thinks about how we run our business. Laugh and joke all you want, I’m not in the biz to impress people who will never do business with me.
Don't ever read my posts again. You have hurt me to no end. If I ever, ever, catch you reading my posts, I will call your GP's douchebags and whinny bitches. DON'T READ THIS POST...STOP....DON'T DO IT
[quote=Philo Kvetch]
LOL, ouch that one hurt.