Who do you trust when you must ask for advice.

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Depardieu
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Who do you trust when you must ask for advice.

Post by Depardieu »

I will try to keep this short.

I am a graduate student (master of administration) about to graduate. I am being recruited by Edward Jones to open up a new branch in my small town. I have heard horror stories about EJ and how their business model allows for unethical decision making by the financial adviser.

I really like the idea of being a financial adviser, but I do not want to be in a position where I'm constantly forced to put my interests ahead of the client. Who, then, should I work for? What fee-only firm would give me a great future as a financial adviser?

I am trying to understand the business but I am just getting started, so I could use some insight. Here are my sources of information on Edward jones:

I asked a question at ask.metafilter.com : http://ask.metafilter.com/270193/Do-you ... ne-3923520

Bogleheads forum discussion on Edward Jones:
http://www.bogleheads.org/forum/viewtopic.php?p=737961
RadAudit
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Re: Who do you trust when you must ask for advice.

Post by RadAudit »

Welcome to the forum.

Trust your gut.

My folks had and I still have an account at Ed. Jones. While I don't believe Ed Jones promotes unethical behavior, I do believe that some of their products / sales may not be at the lowest price available in the marketplace. I don't think that is necessarily unethical.

Now it may be that the products / sales are offered to individuals who could use the product but are unable / unwilling to find it on their own and are willing to pay the extra cost for someone else to find it for them.

In my parents' case, they desperately wanted tax free income. Ed Jones sold them municipal bonds. Now in retrospect, that may not have been the absolute best way to pursue the objective of tax free income but this is now and that was then. I don't buy anything from Ed Jones now; but, that's my decision. And I'll close out my account when the last bond is called.

You'll have to make this call on your own. I believe you can be ethical and work for Ed Jones. However, I also believe you have to believe that what you are selling is in the best interest of the client to be an effective salesman. When and how you decide to switch to being low cost and ethical will be your call.
Last edited by RadAudit on Mon Oct 20, 2014 5:37 pm, edited 1 time in total.
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chaz
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Re: Who do you trust when you must ask for advice.

Post by chaz »

Depardieu wrote:I will try to keep this short.

I am a graduate student (master of administration) about to graduate. I am being recruited by Edward Jones to open up a new branch in my small town. I have heard horror stories about EJ and how their business model allows for unethical decision making by the financial adviser.

I really like the idea of being a financial adviser, but I do not want to be in a position where I'm constantly forced to put my interests ahead of the client. Who, then, should I work for? What fee-only firm would give me a great future as a financial adviser?

I am trying to understand the business but I am just getting started, so I could use some insight. Here are my sources of information on Edward jones:

I asked a question at ask.metafilter.com : http://ask.metafilter.com/270193/Do-you ... ne-3923520

Bogleheads forum discussion on Edward Jones:
http://www.bogleheads.org/forum/viewtopic.php?p=737961
Apply at Vanguard, an ethical company.
Chaz | | “Money is better than poverty, if only for financial reasons." Woody Allen | | http://www.bogleheads.org/wiki/index.php/Main_Page
Boglegrappler
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Re: Who do you trust when you must ask for advice.

Post by Boglegrappler »

Years ago their business model had a lot of "untraded" investments such as partnerships that invested in this, that, or the other. There was a heavy commission associated with these.

If people own investments that aren't quoted, the broker gets to avoid the daily or weekly handholding about what to do....should I buy more, should I sell, etc. etc.
Over the longer haul, the investments either work out or they don't, but usually no one knows for 4-5 years or so. The people who pick EDJ tend to be those who want someone else to take responsibility for them. They aren't going to feel competent on a Bogleheads site.

You have to decide what you enjoy doing and what you're able to do. It doesn't sound like this is the best route for you to take, IMO.
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celia
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Re: Who do you trust when you must ask for advice.

Post by celia »

I say you can trust Bogleheads pretty much (although we might not be aware of all the details of a situation).

The reason I say that is that there are enough people here with various experiences that even if an unwise/less than satisfactory opinion is posted, others will counter it with further information. We also don't gain (or lose) anything if you take our advice or not. We try to have YOUR best interests in mind.


My opinion on the EJ offer is that it seems strange that EJ wants you to initially open an office without having experience in working in one of theirs. Most likely the information you originally posted is not complete, but if I was in charge of EJ, I would want you to work in another branch or two for a while before opening up an office. You probably would be responsible for training new employees but may not yet have a thorough understanding of what their tasks and company procedures are.

However, possibly this is an opportunity to run an office ethically and hold standards for your staff that are above the company's current standards.
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Buffetologist
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Re: Who do you trust when you must ask for advice.

Post by Buffetologist »

Let's be clear. Bogleheads is not a religion. Investment advisors are not generally dishonest. They are salesman. They sell products to people who are either not capable or not willing to think through what's best for themselves. I have many friends who like their financial advisors and many have happy clients. The products they sell, loaded funds, commissioned insurance products, etc are not the best people can find, but for many people, they are better off using financial advisors than not investing at all or investing improperly, either too aggressive or too conservative.

The do-it yourself approach requires a little education, but a lot of self-confidence. Not everybody has it.

I wouldn't have any problem with you becoming an Edward Jones financial advisor. Do what's best for your clients with the products that you have access to and be open and honest of the value they will get from you. If you do that, they will be YOUR customers not Edward Jones. You can eventually build up a reputation for honesty and trust and you will be able to make a living being an independent financial advisor and provide better value.

Some people fix their own cars, do their own carpentry, etc. I don't have special skills or training in that area, so I'm happy to write check. Investing is something that I can understand and don't need someone else to do my math. However, many people need financial advisors and wouldn't sleep at night worrying about their investments.
saladdin
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Re: Who do you trust when you must ask for advice.

Post by saladdin »

Here's what you have to realize about sales jobs. You will report to region managers, area managers and district managers who will push sales because their jobs/bonuses depend on your sales. Regardless of what you sell this is how it works for 99% of the world. It's not possible for a person to have a career at any place when they are pushed to sell stuff that they have no heart in. And it sounds like you don't have the heart. I've never heard EJ to be "unethical" in the way I think you mean it, as in stealing little old ladies money but they will not steer a client into the best decision a lot of the time.

Can you sleep at night knowing you had to recommend the 3rd best thing for a client? If so, go for it. But if you can't do that, you'll be fired soon any way. If you don't sell, you'll be gone. Standing up for your personal ethics (I don't mean illegal) is sure fire way to get sacked.
protagonist
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Re: Who do you trust when you must ask for advice.

Post by protagonist »

Ultimately you are responsible for your own ethical behavior, regardless of where you work or the pressures to conform.

If you can be true to yourself, you will be an asset to society as well as to the professional community, at Jones or wherever.

That said, it is very easy to fall prey to ethical compromise when immersed in a specific professional cultural milieu. After awhile you convince yourself that this or that is not really so bad and may even be the right thing, because everybody around you is doing it, they convince you to do it, and they justify it. That can be a downward spiral. I think many people start their careers with very high ideals and don't realize when they are being slowly eroded by the subculture in which they spend most of their working hours.

So you need to know yourself, be strong and true to yourself, and not fear cutting bait when you smell something that does not agree with you. You have to be able to look yourself in the mirror in the morning and be happy with what you see.

Check out this recent "This American Life" episode. It may provide some valuable insight in this regard. http://www.thisamericanlife.org/radio-a ... en-segarra
Last edited by protagonist on Tue Oct 21, 2014 4:20 pm, edited 1 time in total.
protagonist
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Re: Who do you trust when you must ask for advice.

Post by protagonist »

Actually this article in Bloomberg (by Michael Lewis, author of Flash Boys) expresses it perfectly. Please read this, Depardieu.
http://www.bloombergview.com/articles/2 ... all-street
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Re: Who do you trust when you must ask for advice.

Post by abuss368 »

Bogleheads!
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