So long, mr weddle
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Look, Spiff, I’m not about picking fights with you. All I’d like you to do is to do the research before closing any doors.
The bar charts are the best!! Keep usin' them. I could sell so much shit from the bar charts, it was awesome. You know Spiff, its just that you and your firm went around all these years talking shit about how different and how much better your firm was than anyone else..ala the WSJ story. Now your great leader has decided that things "have changed" and you want to join the party. Tell me if mine is better, I need to hear it...I need the justification. You will always be behind, because Jones isn't serious about the financial planning aspect. It just wants to put money into the pockets of the gp's. IF they were, why wouldn't they open the platform up....all the way. Because there's some scary funds out there and we don't want our dumbass reps to hurt themselves or their clients. THEY DON'T TRUST YOU TO DO THE RIGHT THING....SO THEY LIMIT WHAT YOU HAVE AVAILABLE. OH AND IT PROTECTS THE RELATIONSHIPS THEY'VE DEVELOPED ...YOU KNOW THE KICKBACKS. IT KEEPS THE VETS OFF THEIR ASS, AND MAKES THE BOYS CLUB CONTENT. WEDDLE, WELL HE CALLS THAT...A WIN WIN.
[quote=Spaceman Spiff]
Mike - those things have nothing to do with the comment about not having a finanical planning ability. I'd argue that cold calling debases the entire industry. But that's for another thread.
Funny though. The two largest offices in my region (both over $100 million) are in strip malls. One is next to a Subway. The other is next to a dry cleaners. I want a real answer from Philo, spears, spiked, foot, et al. [/quote] Spiff, they're baitin' ya, buddy! Relax....this thread actually makes ME want to start taunting you. All will be well.The bar charts are the best!! Keep usin’ them. I could sell so much shit from the bar charts, it was awesome. You know Spiff, its just that you and your firm went around all these years talking shit about how different and how much better your firm was than anyone else…ala the WSJ story. Now your great leader has decided that things “have changed” and you want to join the party. Tell me if mine is better, I need to hear it…I need the justification. You will always be behind, because Jones isn’t serious about the financial planning aspect. It just wants to put money into the pockets of the gp’s. IF they were, why wouldn’t they open the platform up…all the way. Because there’s some scary funds out there and we don’t want our dumbass reps to hurt themselves or their clients. THEY DON’T TRUST YOU TO DO THE RIGHT THING…SO THEY LIMIT WHAT YOU HAVE AVAILABLE. OH AND IT PROTECTS THE RELATIONSHIPS THEY’VE DEVELOPED …YOU KNOW THE KICKBACKS. IT KEEPS THE VETS OFF THEIR ASS, AND MAKES THE BOYS CLUB CONTENT. WEDDLE, WELL HE CALLS THAT…A WIN WIN.
Spears - if you go to arbitration & you have a wrap account & you don't have a file a few inches thick on the funds you've chosen & why you've chosen them & why you didn't choose the one next to it & how you manage watch lists. You lose. Jones and most other firms have universes to pick from because they believe that they can meet client's goals with those universes & manage their risks(and make some money). Clients don't know the difference, and an effective rep at Jones will do the same good job that someone elsewhere does. I know and you know plenty of Jones reps and bank reps and wirehouse reps who do a good job & plenty who have all the tools and do a crappy job.
You know, at the end of the day, my clients don’t care about the kickbacks, GPs, WSJ stories, platforms, etc. They want me to tell them if they can retire. They want me to tell them how much money they have to save to put their kids through school. They want me to look them in the eye and tell them they are going to be alright. They want to know if they need to take more or less risk to reach their goals. They don’t care what tools I use to do it. They don’t care how fancy or plain they are. Whether I use a Monte Carlo simulation or just a strait compounding factor. They simply don’t care.
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. - Philo This was the statement that started this whole afternoon's discussion. It's not obvious to me that I don't have a planning side to my business. It was obvious 2 years ago. Not so much now. I'm curious what kind of things that Philo (sorry to keep including you in this, but the quote is yours), et al thinks EDJ should have to actually say they do financial planning like everyone else.Fair enough. Let’s start with this:
A prospect that you’ve been working on comes in for a meeting with his financials. The total’s about $7 million. Prospect tells you he’s looking for comprehensive work. His daughter’s husband is a ne’er-do-well, and he’d like things tied up so that the son-in-law can’t hurt him, but the grandchildren are set. Naturally he’d like trust work (ILIT or whatever) to protect his wife should anything happen to him. He asks you to sketch out some broad strokes and meet with him in 10 days or so.
First question: Who in your company do you call to get together a team of experts to help you?
Second: How many of these experts have you already met?
And so on. You get the idea. Financial planning is not some silly software…it’s defense in depth for the clients’ assets.
[quote=Broker24] [quote=Spaceman Spiff]
Mike - those things have nothing to do with the comment about not having a finanical planning ability. I’d argue that cold calling debases the entire industry. But that’s for another thread.
Funny though. The two largest offices in my region (both over $100 million) are in strip malls. One is next to a Subway. The other is next to a dry cleaners.
I want a real answer from Philo, spears, spiked, foot, et al. [/quote]
Spiff, they’re baitin’ ya, buddy! Relax…this thread actually makes ME want to start taunting you. All will be well.
[/quote]
B24, I don’t speak for anyone but myself on this, but let me assure you that I’m deadly serious…we have the unfortunate power to blow up not only a portfolio but a family’s entire financial legacy through arrogance coupled with ignorance. So to say that “my software is as good as anyone’s so I can do financial planning” is a statement that scares me to my very core. It’s lunacy to believe that solely because one has access to a computer makes one an expert.
[quote=Philo Kvetch]Fair enough. Let’s start with this:
A prospect that you’ve been working on comes in for a meeting with his financials. The total’s about $7 million. Prospect tells you he’s looking for comprehensive work. His daughter’s husband is a ne’er-do-well, and he’d like things tied up so that the son-in-law can’t hurt him, but the grandchildren are set. Naturally he’d like trust work (ILIT or whatever) to protect his wife should anything happen to him. He asks you to sketch out some broad strokes and meet with him in 10 days or so.
First question: Who in your company do you call to get together a team of experts to help you?
Second: How many of these experts have you already met?
And so on. You get the idea. Financial planning is not some silly software…it’s defense in depth for the clients’ assets.[/quote]
Good answer.
Is the Jones reps getting 66s a new thing, or has that been going on for a long time? And don't most of the wirehouse reps NOT have 66s? (I'm guessing because of the whole Merrill rule issue).
Spiff, I'm not singling out Jones about the financial planning. Every client that I've met that also has accounts elsewhere, be it SB, ML, EDJ, anywhere, has never had their advisor meet with them and write an actual financial plan (document advice). It's been mostly transactional relationships at the competitors in my area. I realize that the fact that I've brought over accounts from these firms may be because the relationships were only transactional, and maybe their other clients are receiving a high level of ongoing comprehensive, documented financial advice. But I don't see how that's possible if the competitors in my area (for the most part) don't even have 66s. Isn't that a requisite for charging for advice, or setting up wrap accounts (advisory accounts)? And as far as planning tools/software goes, it's my opinion that all of those tools are just glorified calculators anyway, so as long as you understand the output and can relay it to the client in a way they can understand, that's the important part. That said, we're getting a new software suite in the 1st quarter of '08 that I'm excited about. It will tie into existing advisor apps to pull in data, which should be very nice.Spiff, my question to you is what or how do you define financial planning? I think in order to try and establish "the greener" grass story on this topic is to have clarity first on what you view as planning.
I'd say the vast majority have 66s (or 65/63 combinations) and have had them for years. They're a requirement, as you mentioned, for any kind of advisory account, and it's hard to imagine many wirehouse people who don't have some SMA or fund advisory business. The "Merrill rule" had to do with charging a flat fee on a brokerage account, which never required a 66, since all advice was incidental.And don’t most of the wirehouse reps NOT have 66s? (I’m guessing because of the whole Merrill rule issue).
So then what’s the issue with the Merrill rule? I thought it was that with the rule’s strikedown, the reps NOW needed a 66 to offer a flat fee brokerage account, and the wirehouses didn’t want to take on the potential legal nightmare that having fiduciary reps implies (IARs), or that being both an RIA and B/D implies?
So did the Merrill rule get rid of the flat fee brokerage account, or did it just make it a requisite to have a 66 if you offer said account?Help me out here, I must be confused.
[quote=Big Taco]So then what’s the issue with the Merrill rule? I thought it was that with the rule’s strikedown, the reps NOW needed a 66 to offer a flat fee brokerage account, and the wirehouses didn’t want to take on the potential legal nightmare that having fiduciary reps implies (IARs), or that being both an RIA and B/D implies?
So did the Merrill rule get rid of the flat fee brokerage account, or did it just make it a requisite to have a 66 if you offer said account?Help me out here, I must be confused.[/quote]
Don't feel bad about being confused, most people are, and that goes to the heart of the issue. The end of the Merrill rule meant the end of flat fee brokerage accounts, period. The important word there being “brokerage”. In a brokerage account the rep is technically being paid ONLY for transactions and any advice is considered incidental. The regulations government rep conduct were the same rules as a commission brokerage account, that being that the investments must be “suitable” for the client.<?: prefix = o ns = "urn:schemas-microsoft-com:office:office" />
The argument against flat fee brokerage accounts from those that opposed them was that the public was confused about the obligation reps had in brokerage account with the “suitable” requirement and an advisory relationship, which has a higher standard (and different regulations), that of fiduciary.
They claimed clients assumed that reps in both situations had an obligation to avoid all possible conflicts of interest (like any proprietary products, nothing the firm had an underwriting hand in, etc.) as a fiduciary has, instead of simply the obligation to disclose any possible conflicts, as a brokerage account requires.
The end result is that you couldn’t simply get a 66 and “fix” a flat fee brokerage situation (most reps with flat fee accounts already had a 66 anyway), since the “confusion” on the part of the client remained. Any flat fee going forward would have to be an advisory account, with the higher fiduciary standard.
I don’t know how much that helps, but there’s the general lay of the land. IMHO, it’s all about our antiquated regulatory system that separates brokerage from advisory business..
Under the new disclosure rules, financial professionals must advise clients that brokerage accounts are not advisory accounts and that firms’ interests may not always be aligned with the clients’. Firms must also make someone available to clients to discuss the differences between an investment advisor and a broker. And brokers’ financial planning advice must only be “incidental” to the traditional brokerage services they provide.
Thanks EPT. So the flat fee brokerage account is gone forever. Okay.
I thought it was an issue of a rep needing a 66 to offer the flat fee brokerage account, and firms didn't want the reps to have the fiduciary responsibility of an advisory type account. So are most wirehouses also RIAs? Since their reps can offer advisory accounts, then they must be Investment Adviser Representatives (IARs)?
[quote=Big Taco]
So are most wirehouses also RIAs? Since their reps can offer advisory accounts, then they must be Investment Adviser Representatives (IARs)?[/quote] Yep, on that business involving advisory relationships.[quote=ExPropTrader]
Under the new disclosure rules, financial professionals must advise clients that brokerage accounts are not advisory accounts and that firms’ interests may not always be aligned with the clients’. Firms must also make someone available to clients to discuss the differences between an investment advisor and a broker. And brokers’ financial planning advice must only be “incidental” to the traditional brokerage services they provide.[/quote] Actually that's no new. That was all already stated in the 18 or so pages of disclosures the legal department had slipped into the back of flat fee account opening documents years ago. Those disclosures didn't satistfy the critics. The advice in a brokerage account is still incidental, but flat fee option is gone. Now, rolling out in early 2008 at several wirehouses is some account that's supposed to be a hybrid of an advisory/flat fee brokerage account. I don't have the deatils yet and I'm pretty curious just how they plan to walk that fine line.Okay, so if everyone has 66s, do those of you who work at wirehouses feel that you’re focusing on financial planning (other than advice that is “incidental”, and comes up in conversation at review meetings)? By this I mean that many of your clients (10% or more) pay you a retainer to gather pertinent data on their finances, run it through some sort of planning software and meet with the client frequently (quarterly or semiannually) to educate and help implement documented advice and provide a compliant deliverable. I don’t see this being done at any of my local competitors.
Also, I'm not at all suggesting that this is the best way to do business, or that one way is best for all clients.[quote=Philo Kvetch] [quote=Broker24] [quote=Spaceman Spiff]
Mike - those things have nothing to do with the comment about not having a finanical planning ability. I'd argue that cold calling debases the entire industry. But that's for another thread.
Funny though. The two largest offices in my region (both over $100 million) are in strip malls. One is next to a Subway. The other is next to a dry cleaners.
I want a real answer from Philo, spears, spiked, foot, et al. [/quote]
Spiff, they're baitin' ya, buddy! Relax....this thread actually makes ME want to start taunting you. All will be well.
[/quote]
B24, I don't speak for anyone but myself on this, but let me assure you that I'm deadly serious...we have the unfortunate power to blow up not only a portfolio but a family's entire financial legacy through arrogance coupled with ignorance. So to say that "my software is as good as anyone's so I can do financial planning" is a statement that scares me to my very core. It's lunacy to believe that solely because one has access to a computer makes one an expert.[/quote] Not disagreeing with you. I wasn't defending anyone's position. You're point above is quite true, in fact. I think at this point everyone is just trying to swing a bigger %$#@ than each other. Being an Indy or a wire broker, or a Jones broker, or a bank guy does not automatically qualify you as an expert in anything, regardless of the tools. However, many people in any of those platforms are very good at planning, or very bad (or don't focus on it). To address your point, for those at Jones that have high level planning/estate considerations, there are plenty of resources. They just don't roll out the red carpet for Seg 1 newbies trying to do retirement planning for a 28 year old making 32K a year. But believe me, the resources are there. We have a couple guys in the region that are estate planning experts that have actually had estate planning attorneys flown out from St. Louis to assist in advanced planning concepts. These guys partner with a 100 member local estate planning firm that charges about $500/hr. with $10,000 minimum fees. These guys do planning for seriously wealthy individuals (OK, not the UHNW you would get at Goldman or Lehman, etc., but we're talking in the 10's of millions). My point is, the growth at Jones is relatively recent (last 5-10 years), so the majority of advisors are early in their careers. You aren't doing advanced planning two years into an advisory career in this business (absent previous experience). But you can't base your judgement of Jones on what a bunch of unhappy newbies have posted on this board (no, not all of them are newbies, some had very impresive careers at Jones). I have said this before, and I will say it again. It does not matter what firm you work for (within reason), if you want to focus on complex planning issues, or retirement planning, or whatever, you can. It's up to the individual. We have people at Jones (albeit very few) that have 300-500mm in assets, grossing 1-2mm, and bringing home 60% net (net commission + bonus, not including LP/GP or profit sharing). That's not too shabby, and you don't do that by door-knocking and calling on 30 year CIT bonds. The picture that is painted on these threads is often slanted towards the opinions of disallusioned former advisors that did not agree with the business model at Jones. This is fine, but you must understand that not EVERYONE at Jones falls into that category. Most guys I know with more than 6 or 7 years in are netting 200K and not working very much. They don't have many complaints, and have no need to leave, even though they KNOW they could net more by going it alone. One more thing, you're statement -" It's lunacy to believe that solely because one has access to a computer makes one an expert"; It's also lunacy to believe that just because someone leaves Jones and goes independant (or elsewhere), it makes them an expert. It's funny how everyone on this board uses where they work as the barometer for how complex their practice is. Wow, that was long winded. Sorry to hijack that thread.