How to Get my Relatives Out of Edward Jones

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moorso
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How to Get my Relatives Out of Edward Jones

Post by moorso »

I have at least two relatives, maybe three in their late 20's and early 30's who have inherited some money and have opened accounts at Edward Jones. This is bothering me and maybe it shouldn't but I really want to convince them to move their investments into Vanguard for the the cost advantages. I tried to show my niece what the difference in final value might be for $100,000 invested over 30 years with a 7% return versus that same amount invested with Edward Jones and the same return. It appears to be over $300,000 difference. And that is based on not adding any money to the account over the years. I am not sure what their management fee is , but think it is about 1.75%.

My niece would most likely have a very difficult time emotionally telling Edward Jones that she wanted her account moved to Vanguard even if she wanted to, and she probably would be easily convinced by the EJ guy to not make that move. I was wondering if there is some mechanism that would allow me to deal with EJ directly without having her go through the process. Something like financial power of attorney or something similar ?
123
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Re: How to Get my Relatives Out of Edward Jones

Post by 123 »

No one needs to talk to Edward Jones at all. It's the relative's money. They simply need to contact a new broker, like Vanguard, Schwab, or Fidelity and they will "pull" the account from Edward Jones. It's just business. I think you can do it all with clicks these days.
The closest helping hand is at the end of your own arm.
mr_brightside
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Re: How to Get my Relatives Out of Edward Jones

Post by mr_brightside »

i say this respectfully -- honestly -- it's none of your business

especially if they are not actively seeking your guidance

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tvubpwcisla
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Re: How to Get my Relatives Out of Edward Jones

Post by tvubpwcisla »

If you pressure them to move their account from EJ somewhere else and it does not work out for them, they will blame you. I would stay out of it and let them decide. EJ is a good company and some of their funds outperform Vanguard funds more than making up for the increase in fees. Has EJ done anything bad to you in the past or are you just looking for the lowest fees?
Stay invested my friends.
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moorso
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Re: How to Get my Relatives Out of Edward Jones

Post by moorso »

mr_brightside wrote: Tue Jun 15, 2021 8:22 am i say this respectfully -- honestly -- it's none of your business

especially if they are not actively seeking your guidance

--------------------------------------------------------------
IF they lose $300,000 in their lifetime it sure is my business. I would be remiss for not trying like hell to make them move out of there.
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moorso
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Re: How to Get my Relatives Out of Edward Jones

Post by moorso »

tvubpwcisla wrote: Tue Jun 15, 2021 8:22 am If you pressure them to move their account from EJ somewhere else and it does not work out for them, they will blame you. I would stay out of it and let them decide. EJ is a good company and some of their funds outperform Vanguard funds more than making up for the increase in fees. Has EJ done anything bad to you in the past or are you just looking for the lowest fees?
I am looking for the lowest fees and highest growth potential for them since they have 30 plus years to invest. No EJ has not done anything bad to me, but the consensus of most seems to be that EJ is not where you want to park your money for decades since their fees will help drain your account. Parking 90% of your investment money in VTSAX at Vanguard for the duration with no management fees would seem to be far better than EJ
Da5id
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Re: How to Get my Relatives Out of Edward Jones

Post by Da5id »

tvubpwcisla wrote: Tue Jun 15, 2021 8:22 am If you pressure them to move their account from EJ somewhere else and it does not work out for them, they will blame you. I would stay out of it and let them decide.
Totally agree with this point. Unsolicited financial advice is rarely a good idea. I give unsolicited advice to my kids, that's it.
tvubpwcisla wrote: Tue Jun 15, 2021 8:22 am EJ is a good company and some of their funds outperform Vanguard funds more than making up for the increase in fees. Has EJ done anything bad to you in the past or are you just looking for the lowest fees?
Um, really? A "good company"? I did a bit of random googling and found https://topratedfirms.com/brokers/fees/ ... edule.aspx. That fee schedule is a wonder. A bogleheads mantra is "Costs Matter". This can be overdone when quibbling about a basis point or two. With Edward Jones it is tens or hundreds of basis points, a strong headwind to beat indeed for the dubious pleasure of their services.
oldfatguy
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Re: How to Get my Relatives Out of Edward Jones

Post by oldfatguy »

moorso wrote: Tue Jun 15, 2021 8:26 am
IF they lose $300,000 in their lifetime it sure is my business.
How?
7eight9
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Re: How to Get my Relatives Out of Edward Jones

Post by 7eight9 »

You gave your advice. Your neice didn't ask for it nor take it. Time to drop the issue and move on.
I guess it all could be much worse. | They could be warming up my hearse.
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goingup
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Re: How to Get my Relatives Out of Edward Jones

Post by goingup »

moorso wrote: Tue Jun 15, 2021 8:17 am I have at least two relatives, maybe three in their late 20's and early 30's who have inherited some money and have opened accounts at Edward Jones.
It's not a bad idea for young people with little interest in investing to have an advisor. It's not crazy anyways. It's a lot better than trading GME on a Robinhood app. :D

You're making a good case for self-directing a portfolio. Mention Fidelity, Schwab, Vanguard. Perhaps one or more of your young relatives will heed your advice. I wouldn't suggest they do anything urgently, especially if this inheritance happened due to a loss of a parent.

William Berstein's If You Can is suggested reading for Millenials http://efficientfrontier.com/ef/0adhoc/ifyoucan.pdf

Of course, the most important thing they can do to secure their financial future is contribute to their workplace plan, contribute to a Roth, and control debt.
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moorso
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Re: How to Get my Relatives Out of Edward Jones

Post by moorso »

goingup wrote: Tue Jun 15, 2021 8:55 am
moorso wrote: Tue Jun 15, 2021 8:17 am I have at least two relatives, maybe three in their late 20's and early 30's who have inherited some money and have opened accounts at Edward Jones.
It's not a bad idea for young people with little interest in investing to have an advisor. It's not crazy anyways. It's a lot better than trading GME on a Robinhood app. :D

You're making a good case for self-directing a portfolio. Mention Fidelity, Schwab, Vanguard. Perhaps one or more of your young relatives will heed your advice. I wouldn't suggest they do anything urgently, especially if this inheritance happened due to a loss of a parent.

William Berstein's If You Can is suggested reading for Millenials http://efficientfrontier.com/ef/0adhoc/ifyoucan.pdf

Of course, the most important thing they can do to secure their financial future is contribute to their workplace plan, contribute to a Roth, and control debt.
Great advice and great reference. Thanks.
mr_brightside
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Re: How to Get my Relatives Out of Edward Jones

Post by mr_brightside »

oldfatguy wrote: Tue Jun 15, 2021 8:36 am
moorso wrote: Tue Jun 15, 2021 8:26 am
IF they lose $300,000 in their lifetime it sure is my business.
How?
yes please describe exactly how its your business. are you a joint account holder? are you liable or responsible for their financial support / success in any way?

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Da5id
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Re: How to Get my Relatives Out of Edward Jones

Post by Da5id »

moorso wrote: Tue Jun 15, 2021 8:26 am
mr_brightside wrote: Tue Jun 15, 2021 8:22 am i say this respectfully -- honestly -- it's none of your business

especially if they are not actively seeking your guidance

--------------------------------------------------------------
IF they lose $300,000 in their lifetime it sure is my business. I would be remiss for not trying like hell to make them move out of there.
We can't as a rule fix others problems. If they (in your opinion) choose the wrong spouse, buy the wrong house, buy the wrong car, select the wrong career, go to the wrong school, etc will you try to push them to fix those too? And how long do you think they will be talking to you if you try? Offering input if asked is of course always fine. Gentle hints (maybe giving a book on investing as a holiday gift) can also work, and can even lead to you getting to have the conversation you want to have if they choose to ask you about it. Excessive meddling is probably not a good idea though.
Last edited by Da5id on Tue Jun 15, 2021 9:31 am, edited 1 time in total.
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Wiggums
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Re: How to Get my Relatives Out of Edward Jones

Post by Wiggums »

Da5id wrote: Tue Jun 15, 2021 9:26 am
moorso wrote: Tue Jun 15, 2021 8:26 am
mr_brightside wrote: Tue Jun 15, 2021 8:22 am i say this respectfully -- honestly -- it's none of your business

especially if they are not actively seeking your guidance

--------------------------------------------------------------
IF they lose $300,000 in their lifetime it sure is my business. I would be remiss for not trying like hell to make them move out of there.
We can't as a rule fix others problems. If they choose the wrong spouse, buy the wrong house, buy the wrong car, select the wrong career, go to the wrong school, etc will you try to push them to fix those too? And how long do you think they will be talking to you if you try? Offering input if asked is of course always fine. Gentle hints (maybe giving a book on investing as a holiday gift) can also work, and can even lead to you getting to have the conversation you want to have if they choose to ask you about it. Excessive meddling is probably not a good idea though.
You can lead a horse to water but you can’t make him drink
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tvubpwcisla
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Re: How to Get my Relatives Out of Edward Jones

Post by tvubpwcisla »

Da5id wrote: Tue Jun 15, 2021 9:26 am
moorso wrote: Tue Jun 15, 2021 8:26 am
mr_brightside wrote: Tue Jun 15, 2021 8:22 am i say this respectfully -- honestly -- it's none of your business

especially if they are not actively seeking your guidance

--------------------------------------------------------------
IF they lose $300,000 in their lifetime it sure is my business. I would be remiss for not trying like hell to make them move out of there.
We can't as a rule fix others problems. If they (in your opinion) choose the wrong spouse, buy the wrong house, buy the wrong car, select the wrong career, go to the wrong school, etc will you try to push them to fix those too? And how long do you think they will be talking to you if you try? Offering input if asked is of course always fine. Gentle hints (maybe giving a book on investing as a holiday gift) can also work, and can even lead to you getting to have the conversation you want to have if they choose to ask you about it. Excessive meddling is probably not a good idea though.
One of the best comments and words of wisdom I have seen on this forum. Very well said!

If folks spent half as much time fixing their own issues rather than trying to fix someone else's problems it would be amazing how far they could reach.
Stay invested my friends.
NotWhoYouThink
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Re: How to Get my Relatives Out of Edward Jones

Post by NotWhoYouThink »

Moving them out of EJ does absolutely no good by itself, and can do great harm. It only helps if they decide to take an active role in managing their own investments, and only if that active role consists of picking an asset allocation and sticking to it with low cost funds.

If they do anything else, like moving it to another place with practices similar to EJ, or putting it all in money market funds and leaving it there forever, or actively trading to chase whatever is hot this week, then moving it from EJ will have been an expensive mistake.

So unless you can change their thinking and motivation about managing their investments, leave them alone so you don't cost them money.

And you can't change their thinking and motivation about managing their investments. You sound like you mean well, but that's not nearly enough.
dowse
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Re: How to Get my Relatives Out of Edward Jones

Post by dowse »

Buy them copies of "The Bogleheads Guide to Investing".
Make them aware of the Bogleheads forum, referring them to the many threads on EJ and the wiki article on how to handle a windfall.

As an aside, I have a very close friend who asked for investment advice. I politely and firmly explained that I am not his financial advisor, but if it's helpful, I'm happy to share thoughts on my own portfolio with the caveat that it is not necessarily appropriate for him. I also referred him to this site. He has since thanked me. The advice I gave was how to educate himself so that he could make his own informed decisions rather than offer specific portfolio moves.
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Re: How to Get my Relatives Out of Edward Jones

Post by Boglegrappler »

Bogle's Book the Little Book of Common Sense Investing has some graphs that show the long term cumulative effect of excessive fees. It is an impressive effect, and will get your attention if you care to pay attention at all.
Onlineid3089
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Re: How to Get my Relatives Out of Edward Jones

Post by Onlineid3089 »

I would suggest that unless you were asked you mind your own business. At most maybe mention what you personally do and why, but make sure to be clear that it's just what you do and that they are responsible for their own choices.

As mentioned above, maybe send them the link to If You Can.
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Re: How to Get my Relatives Out of Edward Jones

Post by mptfan »

Did your relatives ask for your advice, or ask you to have power of attorney over their investments? In other words, did they bring up the topic and ask you without you prompting them? If the answer to either of those questions is no, then stay out of it, it's none of your business.
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nedsaid
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Re: How to Get my Relatives Out of Edward Jones

Post by nedsaid »

Some years ago my Aunt asked about how to invest her money. I suggested that she go to Vanguard and I think I told her which fund to buy. Told her that she would save lots of money with very cheap funds.

What she heard was "blah, blah, blah, Vanguard, blah, blah, blah." I was sort of like the teacher in the Charlie Brown TV episodes. "Whaw, whaw, whaw." What she thought was, "Sounds too complicated, I will go to Edward Jones."

So that is pretty much the way it went down. Wasn't really my business but she asked my opinion. In this case, she did something else. It was her money and it was up to her to do with it as she saw fit. I wasn't asked again, so I didn't offer my opinion. I am at peace with that.
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hnd
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Re: How to Get my Relatives Out of Edward Jones

Post by hnd »

Both of the older gentleman I golf with occasionally are happily retired while having paid Edwards Jones' fee structures their entire working careers. You make it sound like they will eventually be destitute. Advisors cost money, some more some less. Some do more than choose investments. I'd personally not like that kind of fee structure.

If they are open and receptive to your advise great, you've given it. you can't live these peoples lives for them.
Mr.BB
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Re: How to Get my Relatives Out of Edward Jones

Post by Mr.BB »

When you show somebody they'll lose $300,000 over their lifetime because of fees and that's not enough to convince them change investment houses, not much more you can do for that person.
If they feel uncomfortable talking to EJ about changing, you can also let them know that they don't have. They can talk to Vanguard and they will do all the communications.
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Post by pkcrafter »

I have at least two relatives, maybe three in their late 20's and early 30's who have inherited some money and have opened accounts at Edward Jones. This is bothering me and maybe it shouldn't but I really want to convince them to move their investments into Vanguard for the the cost advantages. I tried to show my niece what the difference in final value might be for $100,000 invested over 30 years with a 7% return versus that same amount invested with Edward Jones and the same return. It appears to be over $300,000 difference. And that is based on not adding any money to the account over the years. I am not sure what their management fee is , but think it is about 1.75%.
Well, I agree with you, but there is only so much you can do, and it's difficult to help new investors who don't understand the true impact of costs, but investors actually have an obligation to learn about fees and returns. Investors should not be paying for someone else's retirement! They not only have to be concerned with cost, but also portfolio management. You started on the right track, but here is some additional information.

https://moneyning.com/investing/the-imp ... d-returns/

https://www.sec.gov/investor/alerts/ib_ ... penses.pdf

https://investor.vanguard.com/investing ... t-of-costs

https://awealthofcommonsense.com/2013/1 ... -expenses/

John Bogle: “The grim irony of investing, then, is that we investors as a group not only don't get what we pay for, we get precisely what we don't pay for. So if we pay for nothing, we get everything.”

EJ Fees -- take a good look

https://www.edwardjones.com/us-en/discl ... ation-fees

My niece would most likely have a very difficult time emotionally telling Edward Jones that she wanted her account moved to Vanguard even if she wanted to, and she probably would be easily convinced by the EJ guy to not make that move. I was wondering if there is some mechanism that would allow me to deal with EJ directly without having her go through the process. Something like financial power of attorney or something similar ?
She does not have to deal with EJ on the transfer, it is initiated by the receiving company.

Paul
Last edited by pkcrafter on Tue Jun 15, 2021 11:55 am, edited 1 time in total.
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moorso
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Re: How to Get my Relatives Out of Edward Jones

Post by moorso »

All three of them lost their parents at a fairly early age so got essentially no advice from them. Their only advice is coming from EJ as far as I know. They are all very naïve regarding investing. When most people I talk with say run from EJ as fast as you can I find it interesting that a few on here say its none of my business to give some advice about where to park their money for the next 30 years when it is clear that their present path may cost them dearly in the long run. I'll give them my advice, give them some reading material and a spreadsheet so they can see the theoretical cost of doing business with EJ and let them go on their merry way.
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tadamsmar
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Re: How to Get my Relatives Out of Edward Jones

Post by tadamsmar »

I helped my MIL move her nest egg from Raymond James to Vanguard. If I recall correctly, we just had to talk to a vanguard rep. But someone posted that you can do it online at Vanguard these days.

In her case she felt some loyalty to Raymond James since her husband had worked there. But she found out that he was trying to get her to shut down a variable annuity via misrepresentation so be could get a +5% load for reinvesting it. He said that the annuity had to be terminated due to her age, but the annuity company said she could keep it going with a yearly affirmation.

In this case, I put her in a less risky investment with the same return, rather than going for a higher return. I put her in the Vanguard Target Retirement Income fund. Its performance after fees seem to be comparable the value stock heavy portfolio of funds that the annuity was invested in.
jumppilot
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Re: How to Get my Relatives Out of Edward Jones

Post by jumppilot »

moorso wrote: Tue Jun 15, 2021 8:17 am I was wondering if there is some mechanism that would allow me to deal with EJ directly without having her go through the process. Something like financial power of attorney or something similar ?
Say whaaaat? You want a financial POA for your adult nieces and nephews?

I think you need to slow down here. If you’re a trusted family member and not “our overbearing uncle who always want to take control of our lives” then be happy you did your best to guide them.

I have a family member at EJ and, like you, I showed them all the benefits of low cost investing. They don’t care.

I’ve moved on. You should too.
lazynovice
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Re: How to Get my Relatives Out of Edward Jones

Post by lazynovice »

I give anyone who asks the Little Book of Common Sense Investing. I have had a few say, “I am not going to read a book. I am too busy.” I tell those people to put their money in a Target Date Fund or a Balanced Fund.

The issue with RJ, EJ, and other wealth management companies is they can sometimes get returns that offset the fees. Sometimes by taking on more risk. But they can’t be guaranteed of doing it every year.

I prefer they stay with the larger companies than the guy who is on his own down the street.

I try to recommend Vanguard PAS as well but find myself more and more reluctant given Vanguard’s constant service issues.

But a lot of people are just flat out intimidated by the process and feel that 1-2% is a small price to pay for what they get. There are some people who just should not do this themselves. They don’t know the difference between a stock and a bond. They don’t care to know.
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Da5id
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Re: How to Get my Relatives Out of Edward Jones

Post by Da5id »

moorso wrote: Tue Jun 15, 2021 10:27 am All three of them lost their parents at a fairly early age so got essentially no advice from them. Their only advice is coming from EJ as far as I know. They are all very naïve regarding investing. When most people I talk with say run from EJ as fast as you can I find it interesting that a few on here say its none of my business to give some advice about where to park their money for the next 30 years when it is clear that their present path may cost them dearly in the long run.
One can (and I do!) have the following two beliefs simultaneously:
1) Edward Jones is a really bad (one of the worst) places to park one's money. The fees are really high, and they basically milk you like a cow
2) Offering unsolicited financial advice is generally a bad idea. It can damage relationships. It puts you on the hook when the market tanks etc.

If they actually consider you a parental figure in their lives (given the loss of their parents), I'd be more on board with gentle advice I guess. And you do you, people are just pointing out the pitfalls of giving unsolicited advice.
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Re: How to Get my Relatives Out of Edward Jones

Post by Gill »

You seem determined to give them advice regardless of the majority of opinions here saying to back off. I feel giving unsolicited advice is a no win effort and you essentially become a guarantor for the results. If the results are poor it's your fault. If they do well they will credit their own investing skill for the outcome. I avoid giving investment advice to any of my relatives, even my siblings. Edward Jones isn't great but it could be worse.
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Re: How to Get my Relatives Out of Edward Jones

Post by BolderBoy »

Gill wrote: Tue Jun 15, 2021 10:52 am You seem determined to give them advice regardless of the majority of opinions here saying to back off. I feel giving unsolicited advice is a no win effort and you essentially become a guarantor for the results. If the results are poor it's your fault. If they do well they will credit their own investing skill for the outcome. I avoid giving investment advice to any of my relatives, even my siblings. Edward Jones isn't great but it could be worse.
+1. Heed this...
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect
rich126
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Re: How to Get my Relatives Out of Edward Jones

Post by rich126 »

lazynovice wrote: Tue Jun 15, 2021 10:46 am I give anyone who asks the Little Book of Common Sense Investing. I have had a few say, “I am not going to read a book. I am too busy.” I tell those people to put their money in a Target Date Fund or a Balanced Fund.

The issue with RJ, EJ, and other wealth management companies is they can sometimes get returns that offset the fees. Sometimes by taking on more risk. But they can’t be guaranteed of doing it every year.

I prefer they stay with the larger companies than the guy who is on his own down the street.

I try to recommend Vanguard PAS as well but find myself more and more reluctant given Vanguard’s constant service issues.

But a lot of people are just flat out intimidated by the process and feel that 1-2% is a small price to pay for what they get. There are some people who just should not do this themselves. They don’t know the difference between a stock and a bond. They don’t care to know.
The 1-2% at first doesn't sound like a ton but besides it adding up over time, the number that really got my attention was that 1% of your portfolio turns out to be 25% of your 4% SWR. Of course when you are young that doesn't seem important.

I only briefly used an independent FA to manage a small amount of my money. I've always been a big believe not to have all of my eggs in one basket so I thought I should diversify some of the risk of managing my money myself but I quickly gave that up when I had to write those quarterly checks to pay for that choice.

I don't know what the situation is here but I wonder how many people using a FA and paying that 1% fee are paying that out of tax deferred money which makes things even worse.
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moorso
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Re: How to Get my Relatives Out of Edward Jones

Post by moorso »

Gill wrote: Tue Jun 15, 2021 10:52 am You seem determined to give them advice regardless of the majority of opinions here saying to back off. I feel giving unsolicited advice is a no win effort and you essentially become a guarantor for the results. If the results are poor it's your fault. If they do well they will credit their own investing skill for the outcome. I avoid giving investment advice to any of my relatives, even my siblings. Edward Jones isn't great but it could be worse.
Gill
I wouldnt say determined to give advice, well maybe a little lol, but determined to give them the tools they need to make informed decisions other than " man you should put all your money in EJ and it doesnt cost all that much!" They are family and I want them to know there very well may be other better options than EJ. Perhaps I am a little invested in them staying with Vanguard since that is where I setup the transfers of inheritance from several institutions as the trustee, but I also know the advantages of low cost funds, keeping it simple (it certainly isnt at EJ) and just letting your money grow passively. Hearing some of them instantly transferred Vanguard funds (Windsor and Wellesley) out of Vanguard and into EJ I guess tipped me over the edge. :D
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unclescrooge
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Re: How to Get my Relatives Out of Edward Jones

Post by unclescrooge »

rich126 wrote: Tue Jun 15, 2021 11:12 am ... I wonder how many people using a FA and paying that 1% fee are paying that out of tax deferred money which makes things even worse.
Would you care to elaborate how using a tax-deferred account to pay fees is worse (than a presumably taxable account)?
rich126
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Re: How to Get my Relatives Out of Edward Jones

Post by rich126 »

unclescrooge wrote: Tue Jun 15, 2021 11:46 am
rich126 wrote: Tue Jun 15, 2021 11:12 am ... I wonder how many people using a FA and paying that 1% fee are paying that out of tax deferred money which makes things even worse.
Would you care to elaborate how using a tax-deferred account to pay fees is worse (than a presumably taxable account)?
I might be wrong, but if you had a $1M 401K account wouldn't you prefer to pay the fee from your bank account rather than take money out of a tax deferred account and lose the tax deferred compounding of the money?

I'm pretty bad with taxes and am not at the withdrawal stage. I don't even know if you could withdraw money from the 401K to pay account fees. I'm guessing the answer is no (and that would likely negate my comment).
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Re: How to Get my Relatives Out of Edward Jones

Post by tibbitts »

rich126 wrote: Tue Jun 15, 2021 12:31 pm
unclescrooge wrote: Tue Jun 15, 2021 11:46 am
rich126 wrote: Tue Jun 15, 2021 11:12 am ... I wonder how many people using a FA and paying that 1% fee are paying that out of tax deferred money which makes things even worse.
Would you care to elaborate how using a tax-deferred account to pay fees is worse (than a presumably taxable account)?
I might be wrong, but if you had a $1M 401K account wouldn't you prefer to pay the fee from your bank account rather than take money out of a tax deferred account and lose the tax deferred compounding of the money?

I'm pretty bad with taxes and am not at the withdrawal stage. I don't even know if you could withdraw money from the 401K to pay account fees. I'm guessing the answer is no (and that would likely negate my comment).
For example, when my TRPrice money purchase pension plan had an annual (per-fund!) fee, I could pay that out of taxable money and that was a good thing to do tax-wise. If I forgot it would be deducted from my deferred balance. But there is no way that I can imagine to pay the bulk of deferred account fees (such as fund expense ratios) in a deferred account without spending deferred dollars.
Last edited by tibbitts on Tue Jun 15, 2021 12:38 pm, edited 1 time in total.
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unclescrooge
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Re: How to Get my Relatives Out of Edward Jones

Post by unclescrooge »

rich126 wrote: Tue Jun 15, 2021 12:31 pm
unclescrooge wrote: Tue Jun 15, 2021 11:46 am
rich126 wrote: Tue Jun 15, 2021 11:12 am ... I wonder how many people using a FA and paying that 1% fee are paying that out of tax deferred money which makes things even worse.
Would you care to elaborate how using a tax-deferred account to pay fees is worse (than a presumably taxable account)?
I might be wrong, but if you had a $1M 401K account wouldn't you prefer to pay the fee from your bank account rather than take money out of a tax deferred account and lose the tax deferred compounding of the money?

I'm pretty bad with taxes and am not at the withdrawal stage. I don't even know if you could withdraw money from the 401K to pay account fees. I'm guessing the answer is no (and that would likely negate my comment).
Assuming a $10k fee @1% on the million dollar 401k, I would rather pay that pre-tax, and put the difference in a taxable investment account.

In an environment where rates and dividends are under 2%, everything grows tax-free (or close to tax free) until you sell it.
tibbitts
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Re: How to Get my Relatives Out of Edward Jones

Post by tibbitts »

123 wrote: Tue Jun 15, 2021 8:20 am No one needs to talk to Edward Jones at all. It's the relative's money. They simply need to contact a new broker, like Vanguard, Schwab, or Fidelity and they will "pull" the account from Edward Jones. It's just business. I think you can do it all with clicks these days.
As I've mentioned in other threads, this is not the case with every managed account. In my case both Fidelity and Vanguard punted when I asked for help moving funds from Wells Fargo. The only person who could initiate transactions was the broker. Not me (even the web interface was "read-only"), not the brokerage back-office. Maybe if enough money was involved it would have been a different story, but for example being Flagship at Vanguard definitely didn't make a dent in them saying there was nothing they could do to help move the funds.
mdchemist
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Re: How to Get my Relatives Out of Edward Jones

Post by mdchemist »

rich126 wrote: Tue Jun 15, 2021 12:31 pm
unclescrooge wrote: Tue Jun 15, 2021 11:46 am
rich126 wrote: Tue Jun 15, 2021 11:12 am ... I wonder how many people using a FA and paying that 1% fee are paying that out of tax deferred money which makes things even worse.
Would you care to elaborate how using a tax-deferred account to pay fees is worse (than a presumably taxable account)?
I might be wrong, but if you had a $1M 401K account wouldn't you prefer to pay the fee from your bank account rather than take money out of a tax deferred account and lose the tax deferred compounding of the money?

I'm pretty bad with taxes and am not at the withdrawal stage. I don't even know if you could withdraw money from the 401K to pay account fees. I'm guessing the answer is no (and that would likely negate my comment).
I think the opposite would be preferred. We discuss a lot on this site that the advantage of tax deferred investing is due to tax arbitrage (e.g. avoiding paying a tax rate of 24% now in favor of hopefully paying a tax rate of 12% in the future). Paying the fee out of the tax deferred account seems to be the ultimate arbitrage - being able to "withdrawal" the funds at a 0% tax rate.
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Re: How to Get my Relatives Out of Edward Jones

Post by tibbitts »

moorso wrote: Tue Jun 15, 2021 10:27 am All three of them lost their parents at a fairly early age so got essentially no advice from them. Their only advice is coming from EJ as far as I know. They are all very naïve regarding investing. When most people I talk with say run from EJ as fast as you can I find it interesting that a few on here say its none of my business to give some advice about where to park their money for the next 30 years when it is clear that their present path may cost them dearly in the long run. I'll give them my advice, give them some reading material and a spreadsheet so they can see the theoretical cost of doing business with EJ and let them go on their merry way.
It's fine to tell them what you're doing with your investments in a non-combative way, but I haven't found that most people outside the Boglehead world aren't interested in reading material or spreadsheets. And most Bogleheads can't comprehend or accept that. Sometimes people want a personal relationship (or what they perceive to be) for what they feel are important decisions in their lives. You apparently have no authority to be that person. Like many Bogleheads, my parent "lost" roughly the amount you're discussing (several hundred thousand dollars) to fees. I pointed out what I was doing, but who was I? I did have a business undergrad degree, but didn't work in the financial industry or have any investing-specific certifications or degrees. What qualifications do you have? And don't say you "read stuff on the internet."

I consider myself to be relatively competent with investments, and have felt that way for most of my investing life, since I was in my late 20s. Yet even in recent years I've made now-obvious-to-me investing mistakes that have cost me into six-figures. Would an EJ person have saved me from that, after EJ costing me maybe your $300k or more over the years? There were smaller mistakes I've made over the years that also are obvious in retrospect, so maybe EJ could have earned back some of that money, maybe not. What will you do if you make recommendations to these relatives that they later find out cost them large sums, as in my examples? And don't say it couldn't happen, since that's how I felt too. What if you accidentally complicate their tax life by leaving out some detail - are you willing and/or able to fix that for them?
SteadyOne
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Re: How to Get my Relatives Out of Edward Jones

Post by SteadyOne »

The risk is that they follow your advice invest, among other things into equity funds and then see value collapse 50% during a crash. They may panic, sell, blame you for this and the rest is history. Road to hell is paved with good intentions.
“Every de­duc­tion is al­lowed as a mat­ter of leg­isla­tive grace.” US Federal Court
Doctor Rhythm
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Re: How to Get my Relatives Out of Edward Jones

Post by Doctor Rhythm »

The post by tibbits above has it right. You’re an amateur offering unsolicited advice. That rarely goes well, even if the advice is sound.

Unless you’ve shepherded them throughout their lives almost like a foster parent, or you have professional experience in finances, you will lack the standing to give financial advice. If this weren’t the case, they would have come to you for guidance instead of giving you the “ok boomer” brush off. In fact, I might even take it a step further and say they shouldn’t follow your (or any family member’s) investing advice.

Don’t blame them; if I received unsolicited advice from an uncle or aunt about anything that doesn’t involve food, I would smile, nod, and change the subject (to food).
Last edited by Doctor Rhythm on Tue Jun 15, 2021 2:17 pm, edited 2 times in total.
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meowcat
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Re: How to Get my Relatives Out of Edward Jones

Post by meowcat »

hnd wrote: Tue Jun 15, 2021 10:08 am Both of the older gentleman I golf with occasionally are happily retired while having paid Edwards Jones' fee structures their entire working careers. You make it sound like they will eventually be destitute. Advisors cost money, some more some less. Some do more than choose investments. I'd personally not like that kind of fee structure.

If they are open and receptive to your advise great, you've given it. you can't live these peoples lives for them.
I agree with most of the responses, here, but I have to say something about your golf buddies. I find it extremely difficult to believe that they would give EJ probably close to 75% of their life savings and are continuing to give them 75% of their retirement income as well and that they are happy about it. It just doesn't add up. Yes, paying EJ fees for 40 to 45 years, you end up with just 25%.
I don't eat ramen noodles because I'm poor. No, I'm rich because I eat ramen noodles. | -moewcat
mptfan
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Re: How to Get my Relatives Out of Edward Jones

Post by mptfan »

meowcat wrote: Tue Jun 15, 2021 2:12 pm I agree with most of the responses, here, but I have to say something about your golf buddies. I find it extremely difficult to believe that they would give EJ probably close to 75% of their life savings and are continuing to give them 75% of their retirement income as well and that they are happy about it. It just doesn't add up.
He did not say his golf buddies were happy about it...it's likely that they don't know and are simply blissfully ignorant about how much they are paying to EJ, as most people are.
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arcticpineapplecorp.
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Re: How to Get my Relatives Out of Edward Jones

Post by arcticpineapplecorp. »

Boglegrappler wrote: Tue Jun 15, 2021 9:44 am Bogle's Book the Little Book of Common Sense Investing has some graphs that show the long term cumulative effect of excessive fees. It is an impressive effect, and will get your attention if you care to pay attention at all.
Image
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events.
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arcticpineapplecorp.
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Re: How to Get my Relatives Out of Edward Jones

Post by arcticpineapplecorp. »

meowcat wrote: Tue Jun 15, 2021 2:12 pm
hnd wrote: Tue Jun 15, 2021 10:08 am Both of the older gentleman I golf with occasionally are happily retired while having paid Edwards Jones' fee structures their entire working careers. You make it sound like they will eventually be destitute. Advisors cost money, some more some less. Some do more than choose investments. I'd personally not like that kind of fee structure.

If they are open and receptive to your advise great, you've given it. you can't live these peoples lives for them.
I agree with most of the responses, here, but I have to say something about your golf buddies. I find it extremely difficult to believe that they would give EJ probably close to 75% of their life savings and are continuing to give them 75% of their retirement income as well and that they are happy about it. It just doesn't add up. Yes, paying EJ fees for 40 to 45 years, you end up with just 25%.
like Jack Bogle used to say, "You put up 100% of the money, you take 100% of the risk, but you only get 75% of the return."
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events.
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arcticpineapplecorp.
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Re: How to Get my Relatives Out of Edward Jones

Post by arcticpineapplecorp. »

moorso wrote: Tue Jun 15, 2021 11:22 am I wouldnt say determined to give advice, well maybe a little lol, but determined to give them the tools they need to make informed decisions other than " man you should put all your money in EJ and it doesnt cost all that much!" They are family and I want them to know there very well may be other better options than EJ. Perhaps I am a little invested in them staying with Vanguard since that is where I setup the transfers of inheritance from several institutions as the trustee, but I also know the advantages of low cost funds, keeping it simple (it certainly isnt at EJ) and just letting your money grow passively. Hearing some of them instantly transferred Vanguard funds (Windsor and Wellesley) out of Vanguard and into EJ I guess tipped me over the edge. :D
here's a podcast you might want to listen to:
https://www.doughroller.net/podcast/dr- ... -finances/
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events.
investmax
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Re: How to Get my Relatives Out of Edward Jones

Post by investmax »

goingup wrote: Tue Jun 15, 2021 8:55 am
moorso wrote: Tue Jun 15, 2021 8:17 am I have at least two relatives, maybe three in their late 20's and early 30's who have inherited some money and have opened accounts at Edward Jones.
It's not a bad idea for young people with little interest in investing to have an advisor. It's not crazy anyways. It's a lot better than trading GME on a Robinhood app. :D

You're making a good case for self-directing a portfolio. Mention Fidelity, Schwab, Vanguard. Perhaps one or more of your young relatives will heed your advice. I wouldn't suggest they do anything urgently, especially if this inheritance happened due to a loss of a parent.

William Berstein's If You Can is suggested reading for Millenials http://efficientfrontier.com/ef/0adhoc/ifyoucan.pdf

Of course, the most important thing they can do to secure their financial future is contribute to their workplace plan, contribute to a Roth, and control debt.
OP could point them towards this site and forum as well :D
DoTheMath
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Re: How to Get my Relatives Out of Edward Jones

Post by DoTheMath »

I've got to disagree with a lot of the posters here. We're not talking about perfect strangers or work colleagues. I would hope my family would weigh in if I'm making not-great choices, but I would also hope they would kindly say their piece, pay close attention to how receptive I am to their point of view, and then let it go.

In my opinion, leaving EJ is the last step, not the first, of the journey. The conversations about money should happen at the pace set by the listener. Only when they are truly comfortable with the idea of taking the wheel themselves should the the conversation turn to what to do about EJ. There is no urgency here. If they do what you suggest right now, then they're justing putting their faith in a different "expert".

It is entirely reasonable that they would be hesitant about leaving EJ. We're told from a young age that for complicated, important things we should listen to experts. From their point of view, you're the equivalent of the crazy aunt who is pushing that they should leave their doctor and do self-help crystal healing you learned about on the internet. Of course, we all know that personal finance is a bizzaro world where the "experts" are the most likely to rip you off!

And don't forget you could be wrong! Not just in the details but also in the big picture. Maybe their goals are better met by a fee-only advisor instead of going DIY. Or they may want a financial coach-type person who can talk to them about all aspects of money. They may not feel comfortable discussing all the relevant info with you (CC debt? A rich SO? Who knows?).

I think it's good to slowly work on helping them become money smart, but you can't rush it and you have to be willing to take no for an answer.
“I am losing precious days. I am degenerating into a machine for making money. I am learning nothing in this trivial world of men. I must break away and get out into the mountains...” -- John Muir
hnd
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Re: How to Get my Relatives Out of Edward Jones

Post by hnd »

meowcat wrote: Tue Jun 15, 2021 2:12 pm
hnd wrote: Tue Jun 15, 2021 10:08 am Both of the older gentleman I golf with occasionally are happily retired while having paid Edwards Jones' fee structures their entire working careers. You make it sound like they will eventually be destitute. Advisors cost money, some more some less. Some do more than choose investments. I'd personally not like that kind of fee structure.

If they are open and receptive to your advise great, you've given it. you can't live these peoples lives for them.
I agree with most of the responses, here, but I have to say something about your golf buddies. I find it extremely difficult to believe that they would give EJ probably close to 75% of their life savings and are continuing to give them 75% of their retirement income as well and that they are happy about it. It just doesn't add up. Yes, paying EJ fees for 40 to 45 years, you end up with just 25%.
I have no idea what kind of money they have, i don't know what fees they pay, what I do know is that one is retired factory floor worker and the other was a bean counter. they both live in nice houses, drive nice cars, golf almost every day of the week, and travel where-ever they want. Would they have likely had a nicer house, nicer car, etc etc etc had they done all this on their own or found a cheaper advisor route? I'm sure its possible. I think there are worse ways to lose money than spending it on an advisor. Some advisors even on crappy platforms do right by their customers and help them asset plan/stay the course. How at least one of them sees it is that he will leave his children less someday because he paid some guy to help him sleep at night.
Last edited by hnd on Tue Jun 15, 2021 3:57 pm, edited 1 time in total.
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