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Hacksaw View Drop Down
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    Posted: Sep/25/2021 at 4:51pm
Originally posted by Delbs Delbs wrote:

Originally posted by richchick richchick wrote:

Thanks for the replies. Yes it is my understanding that if I stay with EJ I will basically have to find my own successors and will be financially penalized if I don’t split the book up between several brokers. If my next 10-15 years is anything like my last 10 years it will be a several hundred million dollar book. Also I once had aspiration to be an RL/GP but now I’m burnt out on leadership and not interested in that path. I’m grateful for the training and support I received in the early years at EJ but they will be taking hundreds of thousands (millions?) of my future revenue when I feel like I could be successful RIA. And very appealing that I could take a check and walk away someday vs the current EJ retirement structure. 

I would agree with your thoughts. The new retirement transition plans details will be out within the next month. I think it will be better, but still no where near what other firms offer. 

Delbs - would you (or someone else at Jones) mind posting it here when it does come out?  
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Originally posted by B24 B24 wrote:

Originally posted by HCCWManager HCCWManager wrote:

I see this as a real miss by EJ. They have funds, they know the numbers, if they would just open the purse strings and pay close to market rate for the RTP, they would net positive. Especially since they want to split the book up and the newer advisors will grow. Its also a great opportunity to partner with veterans and use the book to bring over middle of the pack warehouse and indy guys who would like to double their book and recruit them accordingly. Big miss by the GPs and very short sighted not to go all in with this "enhancement". Interested to hear the details. Same with the new GK plans and the new Joint Venture Service Partner items. At least Jones is getting better, but seems still far too slow. 

I think Jones banks on the fact that by the time someone is 20+ years into their career at Jones, they don't want the hassle of moving, and know that they will retire with Jones.

This is how all captive firms work...take as much as you can until you think you'll get more pushback than it is costing you already.

Jones has an amazing opportunity as a private partnership to make their advisors very, very sticky. But they seem to be losing focus on that. I've always said, the bigger they get, the harder it is going be to remain a partnership. And I think you are starting to see that.

had lunch with another greenie yesterday.....he seems to think we will go public t some point....they partnership and its returns and structure really was built on recruiting and adding FAs.....thats over.  GPs cashing in while they can.....i don't see it.  But the rules and restrictions for bringing on a a successor and making them stick is a big problem......Jones has become a bureaucratic mess.   
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There’s not a person here who has said look what Jones is doing, I should think about going back. I left 2 years ago and should have left before that. Stay and get in line or make the jump 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote B24 Quote  Post ReplyReply Direct Link To This Post Posted: Sep/25/2021 at 10:21am
Originally posted by HCCWManager HCCWManager wrote:

I see this as a real miss by EJ. They have funds, they know the numbers, if they would just open the purse strings and pay close to market rate for the RTP, they would net positive. Especially since they want to split the book up and the newer advisors will grow. Its also a great opportunity to partner with veterans and use the book to bring over middle of the pack warehouse and indy guys who would like to double their book and recruit them accordingly. Big miss by the GPs and very short sighted not to go all in with this "enhancement". Interested to hear the details. Same with the new GK plans and the new Joint Venture Service Partner items. At least Jones is getting better, but seems still far too slow. 

I think Jones banks on the fact that by the time someone is 20+ years into their career at Jones, they don't want the hassle of moving, and know that they will retire with Jones.

This is how all captive firms work...take as much as you can until you think you'll get more pushback than it is costing you already.

Jones has an amazing opportunity as a private partnership to make their advisors very, very sticky. But they seem to be losing focus on that. I've always said, the bigger they get, the harder it is going be to remain a partnership. And I think you are starting to see that.
"If Bellicheat pulls that rabbit out of his a$$ with this kid at quarterback, I'll personally kiss his ring." - Sporsfreak, 09/20/16

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Post Options Post Options   Thanks (0) Thanks(0)   Quote HCCWManager Quote  Post ReplyReply Direct Link To This Post Posted: Sep/25/2021 at 10:12am
I see this as a real miss by EJ. They have funds, they know the numbers, if they would just open the purse strings and pay close to market rate for the RTP, they would net positive. Especially since they want to split the book up and the newer advisors will grow. Its also a great opportunity to partner with veterans and use the book to bring over middle of the pack warehouse and indy guys who would like to double their book and recruit them accordingly. Big miss by the GPs and very short sighted not to go all in with this "enhancement". Interested to hear the details. Same with the new GK plans and the new Joint Venture Service Partner items. At least Jones is getting better, but seems still far too slow. 
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Originally posted by richchick richchick wrote:

Thanks for the replies. Yes it is my understanding that if I stay with EJ I will basically have to find my own successors and will be financially penalized if I don’t split the book up between several brokers. If my next 10-15 years is anything like my last 10 years it will be a several hundred million dollar book. Also I once had aspiration to be an RL/GP but now I’m burnt out on leadership and not interested in that path. I’m grateful for the training and support I received in the early years at EJ but they will be taking hundreds of thousands (millions?) of my future revenue when I feel like I could be successful RIA. And very appealing that I could take a check and walk away someday vs the current EJ retirement structure. 

I would agree with your thoughts. The new retirement transition plans details will be out within the next month. I think it will be better, but still no where near what other firms offer. 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote richchick Quote  Post ReplyReply Direct Link To This Post Posted: Sep/25/2021 at 1:15am
Thanks for the replies. Yes it is my understanding that if I stay with EJ I will basically have to find my own successors and will be financially penalized if I don’t split the book up between several brokers. If my next 10-15 years is anything like my last 10 years it will be a several hundred million dollar book. Also I once had aspiration to be an RL/GP but now I’m burnt out on leadership and not interested in that path. I’m grateful for the training and support I received in the early years at EJ but they will be taking hundreds of thousands (millions?) of my future revenue when I feel like I could be successful RIA. And very appealing that I could take a check and walk away someday vs the current EJ retirement structure. 
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.......

Edited by missionshooter - Sep/08/2021 at 3:46pm
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Delbs Quote  Post ReplyReply Direct Link To This Post Posted: Sep/08/2021 at 3:41pm
Originally posted by bc2051 bc2051 wrote:

Originally posted by B24 B24 wrote:

Originally posted by bc2051 bc2051 wrote:

One more point, the max that can go to an advisor now is 100 mil where you still get paid.  That number will likely increase over time

You mean, if you give away $125M to an advisor, the retiring advisor only gets paid on $100M of it?

Supposedly, but it's gray like all things at Jones.  There have been a couple of big producers quit, when they couldn't give their kid their entire book

I think Delbs knows of specific examples: big book, small town, and the advisor is paid on the entire thing because there is just no advisors to take it

You still get paid, just less if you leave more than $100mm to one advisor. Exceptions do apply. Also, there is a meeting in mid-October where the new RTP rules/guidelines should start to be released to the field. 
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you guys are lucky this was a bump of an older Edward Jones thread because Kevin Durant on the brooklyn nets would be the topic of a new thread
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Hacksaw Quote  Post ReplyReply Direct Link To This Post Posted: Sep/08/2021 at 12:49pm
Originally posted by B24 B24 wrote:

Originally posted by BigCheese BigCheese wrote:

If you are an RIA, I am seeing metrics that are not normal at all. I have a friend who is doing 1.35M net just south of 3m gross  and is fielding huge offers of 10X ebitida...that can't last obviously...or maybe it can for as long as borrowing costs are so freaking low...


10X EBITDA is reasonable for a lot of businesses, especially those with reliable recurring revenue. But it is also possible that there are economies that will be realized in this type of transaction. If there's really $1.6M in expenses on a $3M book, I bet a lot of that can be reduced. So maybe the "true" number is more like 8x or 7x a larger EBITDA number.

That's still 4.5x revenue, so still a huge number. Not sure I would pay $13M for a "traditional" $3M book though. There's got to be upside that isn't mentioned in here. Like if there's a bunch of small, younger clients in the book with big upside in the future. Or institutional clients with a lot of assets to be had. But no way someone is paying 10x EBITDA for a book of 70 year-olds.

I talked with a business attorney recently who does deals.  He laughed at this on the valuations.  He's seen two he has done where the buyer came in with high "___x EBITDA".  They did initial negotiations and sign an initial contract with a non-disclosure that allows for due diligence to start.  Then they start whittling down the number piece by piece.  

Average age isn't 55 with large outside assets (listed)?  Now it's 8.5x

Don't have all the listed beneficiaries as clients too?  Not it's 7x

You aren't the only person working with the client? Now it's 6.5x

Basically they beat it down as far as they can for whatever reason they want to give.  And after 6 months to a year of this, the final price ends up about the 2-2.5x we all know. But the seller doesn't want to go through it again, so they finalize the deal and sell.

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Post Options Post Options   Thanks (0) Thanks(0)   Quote B24 Quote  Post ReplyReply Direct Link To This Post Posted: Sep/08/2021 at 12:21pm
Originally posted by BigCheese BigCheese wrote:

If you are an RIA, I am seeing metrics that are not normal at all. I have a friend who is doing 1.35M net just south of 3m gross  and is fielding huge offers of 10X ebitida...that can't last obviously...or maybe it can for as long as borrowing costs are so freaking low...


10X EBITDA is reasonable for a lot of businesses, especially those with reliable recurring revenue. But it is also possible that there are economies that will be realized in this type of transaction. If there's really $1.6M in expenses on a $3M book, I bet a lot of that can be reduced. So maybe the "true" number is more like 8x or 7x a larger EBITDA number.

That's still 4.5x revenue, so still a huge number. Not sure I would pay $13M for a "traditional" $3M book though. There's got to be upside that isn't mentioned in here. Like if there's a bunch of small, younger clients in the book with big upside in the future. Or institutional clients with a lot of assets to be had. But no way someone is paying 10x EBITDA for a book of 70 year-olds.
"If Bellicheat pulls that rabbit out of his a$$ with this kid at quarterback, I'll personally kiss his ring." - Sporsfreak, 09/20/16

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If you are an RIA, I am seeing metrics that are not normal at all. I have a friend who is doing 1.35M net just south of 3m gross  and is fielding huge offers of 10X ebitida...that can't last obviously...or maybe it can for as long as borrowing costs are so freaking low...

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Post Options Post Options   Thanks (0) Thanks(0)   Quote MsBroker Quote  Post ReplyReply Direct Link To This Post Posted: Sep/08/2021 at 12:05pm
Originally posted by richchick richchick wrote:

Hi guys - It's been about 10 years since I've posted. I've been hustling to build a good business at EJ. I'm still far from retirement. Here's what's on my mind -- the bigger I build my book with EJ...the more people EJ basically makes me recruit and train for a succession plan. It’s like a disincentive for me to grow my business. If I go to RJ (or somewhere else) where I can sell my book it will still be a challenge to find someone to buy my book. I live in a remote small town and it is hard to find people interested in the FA gig (I have tried and tried). The transition hassle and stress is daunting but that is another topic. So… I’m checking in and looking for advice on future succession planning (a long time from now) at EJ vs RJ. 


Hey RichChick, I'm in a similar situation, and just transitioned to RJ last year. Feel free to send me a PM. With the right structure, you can cut out a lot of the typical "business" stuff that scared me. I've found that if you want help with selling your book, RJ will actively work to do so. But only if you want them to, it's obviously never pushed on you in any way. 

The difference between actually your book and building a book for EJ is hard to overstate. They do not, and will not ever see those clients as yours. 
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Originally posted by richchick richchick wrote:

Hi guys - It's been about 10 years since I've posted. I've been hustling to build a good business at EJ. I'm still far from retirement. Here's what's on my mind -- the bigger I build my book with EJ...the more people EJ basically makes me recruit and train for a succession plan. It’s like a disincentive for me to grow my business. If I go to RJ (or somewhere else) where I can sell my book it will still be a challenge to find someone to buy my book. I live in a remote small town and it is hard to find people interested in the FA gig (I have tried and tried). The transition hassle and stress is daunting but that is another topic. So… I’m checking in and looking for advice on future succession planning (a long time from now) at EJ vs RJ. 

I bet you'll find someone willing to move to handle your book eventually. I'd imagine it's harder to find a start up advisor in a smaller town. That said, how big is your book? How big in the town you're in? How far from a major city is your town?

Most likely it's harder to find someone to grind in a small town because business opportunities might be a little more limited. 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote luvindy Quote  Post ReplyReply Direct Link To This Post Posted: Aug/24/2021 at 11:41am
Originally posted by B24 B24 wrote:

Originally posted by luvindy luvindy wrote:

Originally posted by richchick richchick wrote:

Hi guys - It's been about 10 years since I've posted. I've been hustling to build a good business at EJ. I'm still far from retirement. Here's what's on my mind -- the bigger I build my book with EJ...the more people EJ basically makes me recruit and train for a succession plan. It’s like a disincentive for me to grow my business. If I go to RJ (or somewhere else) where I can sell my book it will still be a challenge to find someone to buy my book. I live in a remote small town and it is hard to find people interested in the FA gig (I have tried and tried). The transition hassle and stress is daunting but that is another topic. So… I’m checking in and looking for advice on future succession planning (a long time from now) at EJ vs RJ. 

If you're asking these questions, you'd be far happier in an RJ environment. I made the move 15 years ago now. Best thing I could have done for my career. I feel like an "owner" because I choose to, but there are plenty of ways you can be Indy at RJ and have no more complexity than you have now, without the recruiting BS. PM me.

Awesome! One more recruit and you qualify for a trip! LOL

That's always my goal!
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Post Options Post Options   Thanks (0) Thanks(0)   Quote B24 Quote  Post ReplyReply Direct Link To This Post Posted: Aug/24/2021 at 11:19am
Originally posted by luvindy luvindy wrote:

Originally posted by richchick richchick wrote:

Hi guys - It's been about 10 years since I've posted. I've been hustling to build a good business at EJ. I'm still far from retirement. Here's what's on my mind -- the bigger I build my book with EJ...the more people EJ basically makes me recruit and train for a succession plan. It’s like a disincentive for me to grow my business. If I go to RJ (or somewhere else) where I can sell my book it will still be a challenge to find someone to buy my book. I live in a remote small town and it is hard to find people interested in the FA gig (I have tried and tried). The transition hassle and stress is daunting but that is another topic. So… I’m checking in and looking for advice on future succession planning (a long time from now) at EJ vs RJ. 

If you're asking these questions, you'd be far happier in an RJ environment. I made the move 15 years ago now. Best thing I could have done for my career. I feel like an "owner" because I choose to, but there are plenty of ways you can be Indy at RJ and have no more complexity than you have now, without the recruiting BS. PM me.

Awesome! One more recruit and you qualify for a trip! LOL
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Post Options Post Options   Thanks (0) Thanks(0)   Quote luvindy Quote  Post ReplyReply Direct Link To This Post Posted: Aug/24/2021 at 10:23am
Originally posted by richchick richchick wrote:

Hi guys - It's been about 10 years since I've posted. I've been hustling to build a good business at EJ. I'm still far from retirement. Here's what's on my mind -- the bigger I build my book with EJ...the more people EJ basically makes me recruit and train for a succession plan. It’s like a disincentive for me to grow my business. If I go to RJ (or somewhere else) where I can sell my book it will still be a challenge to find someone to buy my book. I live in a remote small town and it is hard to find people interested in the FA gig (I have tried and tried). The transition hassle and stress is daunting but that is another topic. So… I’m checking in and looking for advice on future succession planning (a long time from now) at EJ vs RJ. 

If you're asking these questions, you'd be far happier in an RJ environment. I made the move 15 years ago now. Best thing I could have done for my career. I feel like an "owner" because I choose to, but there are plenty of ways you can be Indy at RJ and have no more complexity than you have now, without the recruiting BS. PM me.
8/31/12,Sportsfreak:
"If Barak wins this election, or appears to be clearly winning, we are all fucked. Market will tank big time."
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5/23/13 UC:Dow 20k before 20% crrectn Dow 15,
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Post Options Post Options   Thanks (0) Thanks(0)   Quote bc2051 Quote  Post ReplyReply Direct Link To This Post Posted: Aug/24/2021 at 10:18am
Originally posted by B24 B24 wrote:

Originally posted by bc2051 bc2051 wrote:

One more point, the max that can go to an advisor now is 100 mil where you still get paid.  That number will likely increase over time

You mean, if you give away $125M to an advisor, the retiring advisor only gets paid on $100M of it?

Supposedly, but it's gray like all things at Jones.  There have been a couple of big producers quit, when they couldn't give their kid their entire book

I think Delbs knows of specific examples: big book, small town, and the advisor is paid on the entire thing because there is just no advisors to take it
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Post Options Post Options   Thanks (0) Thanks(0)   Quote B24 Quote  Post ReplyReply Direct Link To This Post Posted: Aug/24/2021 at 10:07am
Originally posted by bc2051 bc2051 wrote:

One more point, the max that can go to an advisor now is 100 mil where you still get paid.  That number will likely increase over time

You mean, if you give away $125M to an advisor, the retiring advisor only gets paid on $100M of it?
"If Bellicheat pulls that rabbit out of his a$$ with this kid at quarterback, I'll personally kiss his ring." - Sporsfreak, 09/20/16

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