other firms- what is your thought on the DOL ruling? is EJ crazy for switching everyone to fee based platforms to be compliant?

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IAR, the point is to be a fiduciary. And while it is cheaper for the client, it doesn’t make it right for the client (or anyone). I think it is “greedy” to put someone in AGTHX 10 years ago and call yourself an “advisor”. If, as an advisor, your strategy is to buy and hold A shares, maybe drop your licenses and start a radio show ala Dave Ramsey (not that I have a problem with him). Because that isn’t advising. That is a salesman for fund companies. You don’t pick investments, you don’t actively change allocation, you don’t do anything but sell a fund company and collect .25 for doing that. Call yourself what you are, a salesman. In a wrap account it should force you to actually move clients investments as their life changes or market conditions change.

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EJ has plenty of options for non-fee based accounts. Be smart about how you grow your business. EJ was late in the industry to fee based so yeah a lot of advisors are moving to fee based. In no way are you or your client forced to do so, so don’t be a negative Nancy.

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This is less about being a fiduciary and compliance than it is about forcing the hand of vet advisors to churn their book getting 25bps in trails into 1.35% Advisory and 45bps in fund fees. Isn’t 1.8% in fees in the best interest of a client for a client that paid front end load 10 years ago than .25%? Hypocrites.

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EJ, no they aren’t crazy. The industry has been crazy for years, and now it’s getting some common sense. When you sat for the 7 or maybe the 24 (9/10), did you ever wonder why you had to learn so much? Options, Reits, non tradeable alts, Bonds, preferred stocks, et al. Did you think you would never use those? Did you join the industry to just sell VAs and MFs? Because that isn’t advising, that’s a salesman. Which isn’t a bad thing, but just be honest with yourself and your clients.

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Mp1 our payout has nothing to do with gross production and has everything to do with time in the field, assets in and so on. Unlike wirehouses providing a draw or ria providing nothing we offer a salary for new advisors for up to 4 years. As far as the original post, you should well know we offer options outside of fee based. If you’re switching everyone to fee based without a Frank conversation about costs, flexibility and so on with your client then shame on you or any other advisor with any other practice for that matter.

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Getting back to the initial question-The DOL says nothing about fee based accounts. Ed Jones took the term "fiduciary" and is basically churning (ILLEGAL!). That's all there is to it. Yes, a 66 or 63/65 allow you to wrap accounts, but that does not mean all your accounts have to be wrapped. What the DOL does specifically state is that all qualified assets need to be managed by someone who holds their fiduciary license. Bottom line, ed Jones has a lot of lawsuits coming their way. Moving A share to a fee platform is commison manipulation. Non-debatable

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I'm doing more fee because recurring revenue is where it's at. But someone with $1,000,000 can buy into A-share fund family like American Funds with no load and pay .25bps instead of 1% forever. I explained this to a wealthy prospect and a light bulb turned on. Now it's a matter of finding money that won't get cap gained to death in order for me to take several million in new money...

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Yes, EJ management is crazy and greedy. They will stop at nothing to squeeze their clients and screw over their advisors, all in the name of the top, oldest, private shareholders of EJ, the general partners. At least, if the client insists they want to stay in what they have, EJ will grandfather, but they can refuse to put any new money in the old commission-based portfolio.

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I have 74 million in Advisory. Great great client relationships, genuinely friends with all of them. I don’t lose clients. This business produces a million in production in my 11th year at Jones - 34 years old. What Jones has done for me and my family is incredible. I don’t want or strive to be someone managing all the assets / investments my clients own. I make sure my relationships are rock solid and I provide a full financial planning experience. I don’t work that hard, it’s amazing. Haters are gonna hate. Jones is also the most generous firm. I just watched a new guy take over 80 million in fee based from a retiring advisor. He will be a million dollar producer in year one, no other firm does that.

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IAR, didn’t you hear? EJ is awesome for their workers and their family!! Seriously, how can anyone buy into a company that puts in writing they don’t think of you as much as someone else doing your same job?!?! I mean, it’s in writing! It’s called a pay grid. “You make 500k GDC?? We love you so much, we will pay you 36% of that! We love you just as much as the guy down the road that brings in 1MM in GDC, but we are just going to pay him 40%. It’s not that we love him more, it’s that he loves the company more to bring in more money to the firm so we are going to pay him more.” That is the main reason I left a wire house and 450MM practice to open my own shop. Just be honest.

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Well.. we have grandfathered accounts.. so retired people who aren’t contributing can continue on and do their reviews. We also have other options not just fee based. It’s all about options, i guess have multiple choices makes advisors greedy? Always bad egg advisors, the firm has options to allow the advisor to make the right choices if they choose to do so.

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No one can explain to me how the new laws will make things better. I've not had one client come in my office concerned with how much money I'm making but that seems to be the goal. A few bad apples have ruined the reputation of many. That's all we need. More regulations, more gov't. The DOL is supposed to be regulating unions. Why are their rules going to make me act in the best interest of my clients? You either have integrity or you don't. More policies aren't going to change that.

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Sfa1 you’re actually wrong on how we are approaching the conversion of clients. We credit back all paid commissions against future managed fees...I have dozens of clients that have converted their accounts that aren’t currently paying fees.

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Here's the thing about Jones. They've been compared to the Walmart of investments but that's not accurate. It's more like the McDonalds of investments. What 2 things does McDonald's have going for it? They own the land the restaurants are on and they have a consistent brand. Jones owns the client relationships and have control. When people leave jones they typically take less than 50%. They do not however have a consistent brand. I think it's genius from a profits perspective to have the solutions based appointment approach and then encourage advisory above all else. This creates a stronger brand. A client in Texas will have the same experience as one in New York and California. Most people at jones are not hired to be real sophisticated asset managers. They excel at creating relationships and then should let home office handle the real financial stuff.

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FA1... what was $80m FAs connection? Son of a big producer? In same fraternity as the RL?

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Don't necessarily have to be well connected to pick up a big book. Lot of it's right place right time. Had a friend who was working hard bringing in decent money and this guy left and he took 90 mil mostly fee based. Just right place right time and was making the regional leaders job easy by not being a problem.

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Off topic, but I am New in the biz-can someone please explain how GDC and the grid work? Correct me if I am wrong but I think gross dealer concessions is the gross amount of fees or commissions the client pays to the firm, and the "grid" is how the firm determines your piece of the pie?

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Ej1. We are a true Hybrid. Offer both. And I do know. That is why I don’t work for a Wire house anymore. We also offer a sort of salary in the idea that no producer ever makes less than 100k a year. We don’t incentives on anything. Everyone from my pay down to the lowest producer makes 70% payout and gets profit share (with the floor of 100k). No one can be fired for lack of production either. If you are hired, and can’t make 100k on the 70% payout, we will train you and train you until you are successful. I have nothing against Ed Jones or any other shop, it’s just not for me. That’s why I opened my own.

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Fee based is great. But it is a variable not a full solution. I️ am a qualified plan specialist so I️ have a slightly different take with the endless people being paid on retirement plans who openly admit they don’t understand or really add value at Fiduciary level. Fee or commission is a variable, but focusing only on business where we add value is more important

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No. I took over a small office with about 10 million in assets and built it from there. Never got anymore handouts, unfortunately. Hah.

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