Thoughts on Edward Jones?

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StophJS
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Thoughts on Edward Jones?

Post by StophJS »

I'm hoping to get some opinions on Edward Jones, because they're handling all of my Dad's investments and I feel like it might not be worth the commissions, etc. He's 62 and been with them for years, so the chances he would make a change based on the advice of his 24 year old son are probably pretty slim. However, I still want to mention something about it to him before my parents inherit from their parents.

My understanding is that Edward Jones takes about 5% of any money you give them to invest, which to me already sounds horrible. Add to that high expense ratios on MFs my parents might be holding, and I'm sure it's cost them plenty over the years. All I know about their portfolio is that they've got a good chunk of money in munis, which I take to mean that the advisor is at least respectful of their desire to stay pretty conservative. They trust the advisor and I'm sure he's a good guy, but I'd really hate to see them pay him 5% of their inheritance just to do something they can quite easily do themselves. Any thoughts on Edward Jones, or how I might go about raising this issue with my parents would be appreciated.
dhodson
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Re: Thoughts on Edward Jones?

Post by dhodson »

I'd just graph out or table the costs so they can see how much money this might be. Maybe at least they might not put the inheritance with them. Pretty hard to consider those costs worth it assuming that is what they pay.
Bob's not my name
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Re: Thoughts on Edward Jones?

Post by Bob's not my name »

EJ steals from old people. One of their specialties is selling illiquid individual long term home state munis to elderly people who will soon be in a lower tax bracket or might change states according to their retirement interests, to be near grandchildren, or of necessity when they get older and need care or when one of them dies.

Are you saying your parents are about to inherit because your grandparents are deceased, or is it a longer term concern? Are the grandparents also with EJ?
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StophJS
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Re: Thoughts on Edward Jones?

Post by StophJS »

Bob's not my name wrote:EJ steals from old people. One of their specialties is selling illiquid individual long term home state munis to elderly people who will soon be in a lower tax bracket or might change states according to their retirement interests, to be near grandchildren, or of necessity when they get older and need care or when one of them dies.

Are you saying your parents are about to inherit because your grandparents are deceased, or is it a longer term concern? Are the grandparents also with EJ?

My grandparents are still around as of now, but they are all in their mid-80s. They live in Switzerland so no they're not with Edward Jones. I believe my grandmother on my dad's side just sold an apartment building and gave him an advance on the inheritance from that side, so maybe 5% of that is already in the Jones coffers.
Beat The Street
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Re: Thoughts on Edward Jones?

Post by Beat The Street »

Bob's not my name wrote:EJ steals from old people. One of their specialties is selling illiquid individual long term home state munis to elderly people who will soon be in a lower tax bracket or might change states according to their retirement interests, to be near grandchildren, or of necessity when they get older and need care or when one of them dies.

Are you saying your parents are about to inherit because your grandparents are deceased, or is it a longer term concern? Are the grandparents also with EJ?

This is spot on. They pitch 25-30 year munis to everyone and do not disclose the markup on them. The longer term the bond the bigger the commission and the easier it is to hide.
“Never ask anyone for their opinion, forecast, or recommendation. Just ask them what they have—or don’t have—in their portfolio.” -Taleb
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ofcmetz
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Re: Thoughts on Edward Jones?

Post by ofcmetz »

My opinion is that that you can do much better elsewhere. Fees may be 20 times what you would pay somewhere else. Run far away from this guy and don't look back. Companies like this specialize in transferring wealth from your pocket to theirs.
Never underestimate the power of the force of low cost index funds.
Robert44
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Re: Thoughts on Edward Jones?

Post by Robert44 »

I don' have a problem with Edward Jones. I have two municipal bonds and two corporate bonds with them. They are all worth more now than what I paid for them.
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BL
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Re: Thoughts on Edward Jones?

Post by BL »

Also beware of other brokers (salemen). These costs are not unique to EJ. If they "need" an adviser, a fee-only one might be a possibility (not fee-based). There have been a few lower cost ones mentioned in previous threads.
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tractorguy
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Re: Thoughts on Edward Jones?

Post by tractorguy »

My experience is similar to Bob's not my name. EJ managed my parents accounts and were forever coming to my father with new investment products that would generate a commission. As long as Dad was alive, he was good at turning these down but when he passed, my mother let them do some things that made me grit my teeth when I found out about them 6 months later. Unfortunately, Mom & Dad had been with them for 40 years and Mom wasn't comfortable with a change. I didn't press it because she had enough money that she could afford a few less than optimum investments and her peace of mind in her old age was worth the cost.

After I found out what was going on, I got power of attorney and set myself up to monitor her accounts. I logged in weekly with Quicken to download transactions and let the EJ brokers know that I was doing this. This put me in the loop whenever they wanted to sell any new products and let me minimize the commissions and avoid the obvious wrong moves.
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Bob's not my name
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Re: Thoughts on Edward Jones?

Post by Bob's not my name »

Robert44 wrote:I don' have a problem with Edward Jones. I have two municipal bonds and two corporate bonds with them. They are all worth more now than what I paid for them.
Truly a unique experience, since all other bonds are way down now. :shock:
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ofcmetz
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Re: Thoughts on Edward Jones?

Post by ofcmetz »

Robert44 wrote:I don' have a problem with Edward Jones. I have two municipal bonds and two corporate bonds with them. They are all worth more now than what I paid for them.
Almost all bond funds are worth more now than what anyone paid for them. :?
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Watty
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Re: Thoughts on Edward Jones?

Post by Watty »

They trust the advisor and I'm sure he's a good guy,
If they have been with them for years then it is likely that their salesman is about their age or older. In addition to all the other issues a huge problem that people run into is that eventually the salesman they are happy with(right or wrong) leaves the company, dies, or retires then someone else will take over their account and often this is someone who was chosed to take the account because they are VERY good at generating lots of fees. If your parents are older when this happens then they may not be very good at handling the situation then. Getting their funds on "auto pilot" to avoid this might be something that would help them move.

Their sales person can also get elderly and is not be up to the job. My Mom had an account like this and the salesman never retired but would come into the office maybe a half day a week to handle his remaining accounts and he was well into his 70's if not 80's and had a hard time doing what needed to be done when we were settling her estate.

At the very least they should work with their salesman to come up with a clear written statement of how their funds are to be invested. It could be that they signed something 20 years ago that would allow the next salesperson to do all sorts of things they would not want them to do.


Try to be sure that they also understand that a good general number for a "safe withdrawl rate" (SWR) os 4% including taxes and fees so that if they are paying an advisor even 1% of their funds each year, then that is 25% of their money each year.
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Re: Thoughts on Edward Jones?

Post by RadAudit »

Beat The Street wrote:This is spot on. They pitch 25-30 year munis to everyone and do not disclose the markup on them. The longer term the bond the bigger the commission and the easier it is to hide.
Thanks. That explains a great deal about why my inheritance looked the way it did.
ofcmetz wrote:My opinion is that that you can do much better elsewhere. Fees may be 20 times what you would pay somewhere else. Run far away from this guy and don't look back. Companies like this specialize in transferring wealth from your pocket to theirs.
I think the selling points the EJ broker made when selling to Mom was the reliability of the income streams from the investment and "putting money to work", usually right after another muni was refunded early - about ten years after the original issue date and twenty years before the final redemption date - and had deposited the face amount in to the EJ money market. Toward the end, Mom transferred the EJ money market balance on a monthly basis to her bank's savings account and that seemed to cut down a little on the broker's calls.
FI is the best revenge. LBYM. Invest the rest. Stay the course. Die anyway. - PS: The cavalry isn't coming, kids. You are on your own.
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Re: Thoughts on Edward Jones?

Post by Johm221122 »

Robert44 wrote:I don' have a problem with Edward Jones. I have two municipal bonds and two corporate bonds with them. They are all worth more now than what I paid for them.
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Re: Thoughts on Edward Jones?

Post by JW-Retired »

Watty wrote: Try to be sure that they also understand that a good general number for a "safe withdrawl rate" (SWR) of 4% including taxes and fees so that if they are paying an advisor even 1% of their funds each year, then that is 25% of their money each year.
So true. It's always made me crazy this measure isn't obvious to everyone. Even worse, the advisor fee & commissons & fund expenses will usually add up to at least 2%, and then the client naively takes their "safe" 4% on top of that. So the gross draw is 6% and the nest egg runs out way early.
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nedsaid
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Re: Thoughts on Edward Jones?

Post by nedsaid »

I think the reason that a lot of people invest with Edward Jones is that they are everywhere. People like to "talk to their money" at least by phone and much better in person.

Two family members of mine have accounts with them. They like the convenience of having somebody nearby to talk to. One of them is experienced with investments and the other one is not.

In a previous life, I knew the Edward Jones person for our town. Nice guy.

I have never used them. I think most people can do better if they take the time to educate themselves.
A fool and his money are good for business.
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Re: Thoughts on Edward Jones?

Post by dbonnett »

As soon as they switched to Vanguard to please you, Vanguard could under perform and you would be the eternal goat.
The superiority of low cost funds often only show up periods of about 10 years. Give the folks one of Larry Swedroe's books.
You are treading on dangerous ground....
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Re: Thoughts on Edward Jones?

Post by Boglenaut »

StophJS wrote:I'm hoping to get some opinions on Edward Jones

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Re: Thoughts on Edward Jones?

Post by boobinson »

I'm in the same boat... my 67 year old dad has a relationship with his EJ advisor where they talk all the time, and have become buddies. I think they even golf together every once in awhile, and the EJ advisor even sent me a pewter baby rattle on the birth of my daughter. Just recently my Dad was telling me how him and his advisor were trying to strategize how to allocate his investments in response to the presidential election. I rolled my eyes and pleaded that he should stick to his strategy (whatever it may be), and not time the market.

When I tell my dad that he is most likely paying way too much in fees and that he could do better leaving EJ, he replies that he and my mom are fortunate to have done well, built a nice nestegg, and don't need amazing performance to live their lifestyle. So basically, the EJ advisor can do whatever he wants and provide mediocre returns, and my dad will still be content.

Maybe buying him a Bogleheads type book would be a good way to get him to reconsider his invesments. I doubt that he'll leave his EJ advisor though... I think the best case scenario is that he gets out of the convoluted EJ investments and finds some EJ provided index funds.
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Re: Thoughts on Edward Jones?

Post by Grt2bOutdoors »

The only EJ I want to be using is Ernest & Julio, not Edward Jones.
Edward Jones provides advice the translates in money being moved from your wallet to their wallet. :oops:
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Re: Thoughts on Edward Jones?

Post by Grt2bOutdoors »

nedsaid wrote:I think the reason that a lot of people invest with Edward Jones is that they are everywhere. People like to "talk to their money" at least by phone and much better in person.

Two family members of mine have accounts with them. They like the convenience of having somebody nearby to talk to. One of them is experienced with investments and the other one is not.

In a previous life, I knew the Edward Jones person for our town. Nice guy.

I have never used them. I think most people can do better if they take the time to educate themselves.
I recall reading about a fellow who had opened an Edward Jones office in New Hampshire, by some stroke of similarity, the fellow had focused on selling blue chip stocks and municipal bonds. One of his customers was a retired union president who used to walk into his office with a loaded pocket revolver and made it a practice to show it to the salesman before he conducted business. :shock:
I doubt that customer was ever "short-changed".
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
Yipee-Ki-O
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Re: Thoughts on Edward Jones?

Post by Yipee-Ki-O »

Edward Jones was responsible for an old classmate of mine and another of my friends having very beautiful and very big houses. And a series of wonderful trips to exotic foreign locations. As employees, not customers. While I enjoyed the company of both, my money stayed invested with Vanguard.
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Re: Thoughts on Edward Jones?

Post by Johm221122 »

Yipee-Ki-O wrote:Edward Jones was responsible for an old classmate of mine and another of my friends having very beautiful and very big houses. And a series of wonderful trips to exotic foreign locations. As employees, not customers. While I enjoyed the company of both, my money stayed invested with Vanguard.
A friend of mines husband works for them and they do take lots and lots of exotic trips
John
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StophJS
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Re: Thoughts on Edward Jones?

Post by StophJS »

Thanks everybody, lots of good information here. I've had a chance to skype with my dad about these issues yesterday and he seems open to change.
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William4u
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Re: Thoughts on Edward Jones?

Post by William4u »

Thoughts on Edward Jones?

Bad thoughts, unfortunately. Expensive thoughts.

Lower returns, less diversification, and higher costs are typical there compared to Vanguard Admiral or Fidelity Spartan funds or Schwab's low-cost ETFs. It would be difficult to have a low cost, diversified portfolio at EJ.
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og15F1
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Re: Thoughts on Edward Jones?

Post by og15F1 »

The only Edward Jones customer I know is also a Cramer-guy... :oops: the worst part is that his coworkers all get their investing advice ("tips") from him :oops:
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DaleMaley
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Re: Thoughts on Edward Jones?

Post by DaleMaley »

In 1979, I took an adult ed class taught by an Edward Jones broker. As a text book, he used Venita VanCaspel's 1978 book The New Money Dynamics. Through her book, I learned about the value of compound interest and the importance of saving. This was the good news.

The bad news was that the Jones broker heavily pushed the sales of limited partnerships. I invested a total of about $5,000 in an oil & gas and a real estate limited partnership. I didn't realize these limited partnerships were based upon federal tax law, that could change at any time. They also generated fat commissions for the Jones broker. Sure enough, the tax reform act of 1986 wiped out the limited partnerships. I only lost maybe $1,000. I knew of many people who lost over $100K in these partnerships.

My in-laws got hooked up with this same Jones broker. When they were in their 80s, and the Jones broker was in his 70s, the Jones broker requested they immediately come in to his office. The in-laws took their adult two children with them. The Jones broker recommended they sell some holdings and invest in some new things. He also did a net worth statement for them, literally on the back of an envelope.

The two adult children were not impressed with the Jones broker. They requested I review my in-laws financial affairs. I found the broker make a $100K error on the net worth statement he did on the back of his envelope. I also could find no reason to make the new investments, except to generate a commission for the Jones broker. I ended up taking over the financial planning for my in-laws. I moved everything to vanguard, and they have been very happy every since. The Jones broker retired shortly afterwards.
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Re: Thoughts on Edward Jones?

Post by likegarden »

In my upscale town an EJ guy had his office right next to Starbucks. It seems he did not prosper and closed up. Just now a lady from EJ will be reopening that office and talked to people in my neighborhood. I said that I am a Boglehead, but she did not seem to understand that, I did not take her invitation.
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Re: Thoughts on Edward Jones?

Post by bberris »

JW Nearly Retired wrote:
Watty wrote: Try to be sure that they also understand that a good general number for a "safe withdrawl rate" (SWR) of 4% including taxes and fees so that if they are paying an advisor even 1% of their funds each year, then that is 25% of their money each year.
So true. It's always made me crazy this measure isn't obvious to everyone. Even worse, the advisor fee & commissons & fund expenses will usually add up to at least 2%, and then the client naively takes their "safe" 4% on top of that. So the gross draw is 6% and the nest egg runs out way early.
JW
Isn't it funny how many hoops people jump through to defer taxes, and then turn around and pay more than their tax rate to the advisor and the variable annuity trustee.
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SkierMom
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Re: Thoughts on Edward Jones?

Post by SkierMom »

I have to laugh at Radaudit's reply.

When my Father-in-Law passed away last year, he left a good chuck of money ($900,000) to divide amongst his three sons, one of which is my husband. My husband's brother proceeded to bager us to invest with his EJ saleman, er, Broker, using the same phrasing, "...we're going to make our money work for us." He even invited himself to make an appointment at EJ on our behalf, including sitting in on any discussions of our personal finances that he said, "Would remain confidential". Clearly, he has drank the Ed Jones Kool Aid.

Thoughts on Edward Jones?

My thoughts on EJ are, that I think said Brother-in-Law is such a braggart idiot I didn't tell him I was Boglehead and that my husband and I invest with Vanguard. I want him to stay with Ed Jones wasting his money. That's what I think of Ed Jones.
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Re: Thoughts on Edward Jones?

Post by bcboy57 »

A few years ago Edward Jones was implicated in revenue sharing accusations. I believe it was with American Funds....
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Re: Thoughts on Edward Jones?

Post by Bogle101 »

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Re: Thoughts on Edward Jones?

Post by 6miths »

Not a fan of Edward-Jones. After my father died my mother (age 77) had an account with them as well as a couple of other places. I met with the various advisors she had and after discussions she and I sat down and I explained the potential benefits of consolidating her holdings with a discount broker and investing in a manner consistent with the Boglehead philosophy. She notified the various companies and the necessary transfers were done. A few weeks after this as I looked at all of the paper work, I noticed that her EJ advisor (whom my mother liked very much) had sold her a high MER back-end loaded mutual fund just prior to the transfers being made to the discount broker. When I called the advisor about it she said that she had talked to my mother about it after we had met and my mother had instructed her to make the purchase. There was no ambiguity as to what the plan was when we had had our meeting and what the new investment style was going to be. As I said, not a fan, not at all.
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Midwest_Investor
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Re: Thoughts on Edward Jones?

Post by Midwest_Investor »

I had 6 figures at EJ for about 6 years. This was before I knew much about investing, but I did notice that my account had MANY trades. Something would be bought one month based on some story of growth (or income). Then about 3 to 6 months later, the story would change about the investment, and it would be sold. The commissions were very high, and was paying a total of several thousand in commissions each year. Buying/selling 100 shares of an individual stock was about 4 times the going price at the time. I decided to control this and limit the trades my advisor would/could do. I ended up with blue chips which I was happy with and wasn't in a hurry to move my money out.

But then I learned that Edward Jones Corp gave tons of money to a vote down a (non-financial and non-business related) political ballot measure in Missouri. My politics are such that I wanted the ballot measure to pass, which is the opposite of what Edward Jones was funding. I felt so strongly about this that I wrote a letter to my advisor telling him that I did not think EJ corp should be funding a non-financial and non-business related political cause, and that I was moving my money out.

Two weeks later, I was at a discount brokerage, and I never looked back.
Saving$
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Re: Thoughts on Edward Jones?

Post by Saving$ »

Funds have high ER's (expense ratios).
They also sell many A share funds which require an upfront load, so you lose 5% right out of the gate (invest $100k, EJ broker gets $5k commiss, and your account balance is now $95k).

All that said, each EJ office is sort of like an independent franchise. So the EJ brokers/sales people vary as much as all other people. I invested with them when I was quite young and just starting out taxable investing (ie ran out of space in 401k & IRA). Had I not invested with EJ at that time, I would have done nothing but leave the money in the bank. I think I got an honest broker, and the EJ investments definitely did better than the bank emergency fund. My broker did not churn my investments, etc. They did not do as well as a Vanguard fund would have, but I would not have done that; I needed some personal guidance, and the EJ broker made his living providing that. I also doubt I would have paid an upfront "advisory fee" at the time. I was young and just did not know enough.

If I were in that same situation now, I would hope I could find good resources on the internet. At the time, that was not yet an option. The EJ broker taught me about asset allocation, buy and hold, and diversification. We discussed an elderly relative once, and the EJ broker warned me to help the relative steer clear of annuities due to their high costs. In 2008 when the market crashed, I still had investments there, and the EJ broker called to advise tax loss harvesting, which was a concept I knew nothing about at the time. So I would not agree that EJ has no redeeming qualities. I think they have their place in the right situation with certain people. However, they no longer have a place with me at this time.
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Re: Thoughts on Edward Jones?

Post by Kurt55 »

I wanted to purchase a technology sector mutual fund in the mid-90s that could only be purchased through a broker. I called two different Edward D. Jones brokers at the time and neither would talk directly with me and as I recall their secretaries or someone else unfamiliar with the funds I wanted called me back and told me to purchase the mutual funds directly, which I was unable to do. I felt as though they were giving me the run-around and that it would have been a very easy commission for them because they didn't really have to do much to get the commission from me.

It left a bad taste in my mouth and I will never use them for anything. They along with most of the brokers/financial advisers out there are simply not worth the money, at least for anyone who has more than a cursory understanding of investing.
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hoppy08520
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Re: Thoughts on Edward Jones?

Post by hoppy08520 »

OP, check out some of the links about Edward Jones in this post:

http://www.bogleheads.org/forum/viewtop ... &#p1440344

I have an especially sour taste in my mouth from EJ because my mother was a customer (or should I say victim) of them for many years before I helped her escape to Vanguard. Thanks to Edward Jones, my mother was able to put kids through college--her salesman's kids, that is.
SteveKL
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Re: Thoughts on Edward Jones?

Post by SteveKL »

Don't mean to bump a thread that has just run its course, but I thought that some of the folks who posted here might be interested in a detailed article posted Dec. 6 at Motley Fool entitled "Can Your Edward Jones Financial Advisor Really Serve Your Best Interests?" The editor calls it "an examination of the broker-dealer business model, using the specific case of Edward Jones as an illustrative example."

If you ever need ammo to help convince an EJ client of the error of their ways, this is it.

http://www.fool.com/investing/general/2 ... y-ser.aspx
Cuzz35
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Re: Thoughts on Edward Jones?

Post by Cuzz35 »

SteveKL wrote:Don't mean to bump a thread that has just run its course, but I thought that some of the folks who posted here might be interested in a detailed article posted Dec. 6 at Motley Fool entitled "Can Your Edward Jones Financial Advisor Really Serve Your Best Interests?" The editor calls it "an examination of the broker-dealer business model, using the specific case of Edward Jones as an illustrative example."

If you ever need ammo to help convince an EJ client of the error of their ways, this is it.

http://www.fool.com/investing/general/2 ... y-ser.aspx

Thanks for the link SteveKL. Some of the comments from those at EJ made me cringe. One of them explains that he has seen how vanguard funds outperform their peers due to their low costs. But then he says that those using vanguard would under perform because they would not stick with their plan and that is where is makes up for it. I totally agree part of an adviser's job should be to keep people from buying and selling at the worst times but if this person were truly looking out for his client's best interest than why is he still working for EJ?
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Re: Thoughts on Edward Jones?

Post by Clever_Username »

Cuzz35 wrote: I totally agree part of an adviser's job should be to keep people from buying and selling at the worst times but if this person were truly looking out for his client's best interest than why is he still working for EJ?
Giving that person the benefit of the doubt, maybe he or she believes that those who can most benefit from this help are more inclined to go to a place like EJ than to a place like Vanguard.
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norookie
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Re: Thoughts on Edward Jones?

Post by norookie »

:happy Who said "one cannot serve two masters" ?
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burt
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Re: Thoughts on Edward Jones?

Post by burt »

I remember playing golf with a EJ guy 20 years ago. Mid 30's living high.

Run...........Don't walk.


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ualdriver
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Re: Thoughts on Edward Jones?

Post by ualdriver »

SteveKL wrote:
If you ever need ammo to help convince an EJ client of the error of their ways, this is it.

http://www.fool.com/investing/general/2 ... y-ser.aspx
That story should be it own thread!
NAD83
Posts: 123
Joined: Thu Apr 07, 2011 1:25 pm

Re: Thoughts on Edward Jones?

Post by NAD83 »

I shouldn't have read this thread and linked article before bed. I couldn't get to sleep. It's sad that I lose sleep over these sharks even though I have no business with any.
Grt2bOutdoors
Posts: 25625
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: Thoughts on Edward Jones?

Post by Grt2bOutdoors »

They just opened a new Edward Jones office near my home. I told my wife and made her promise, if something should befall me to never step foot in that place nor take their calls. She asked why - I pointed her to this thread and previous ones.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
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