Dazed, Confused and Upset

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imdone42
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Dazed, Confused and Upset

Post by imdone42 » Mon Jan 12, 2015 8:16 pm

I am just learning about all of the fees that I have been paying at Edward Jones. They do a fantastic job of hiding all of their charges. I have a bunch of Type A funds that have a %5.75 front end load and several expense ratios in the 1% to 1.5% range. I have been talking with Vanguard regarding moving all of my assets over to them into index funds. I have not had the time to put together my portfolio information into the form shown in the sticky yet so it could be reviewed by the forum members. With that being said hopefully its not to ignorant to ask a question about moving funds.

Is there any reason why it would make any sense to stay with EJ?

A little info to help out I hope.

---My wife and I are both 42

---our invested assets are in the low seven figure range. ( it would be much higher had I figured out 12 years ago what I am learning now!)

---our tax bracket is 28%

bluejello
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Re: Dazed, Confused and Upset

Post by bluejello » Mon Jan 12, 2015 8:32 pm

Is there any reason why it would make any sense to stay with EJ?
Nope! Congrats on taking the red pill. :sharebeer

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ogd
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Re: Dazed, Confused and Upset

Post by ogd » Mon Jan 12, 2015 8:34 pm

imdone42 wrote:Is there any reason why it would make any sense to stay with EJ?
No. Edward Jones is pretty terrible, perhaps one of the worst places to invest this side of Madoff. Those investments were specifically chosen to maximize the profits of your advisor and EJ and in the long term they'd take away half or two thirds of your returns.

There's no reason not to tell your friends, either.

sambb
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Re: Dazed, Confused and Upset

Post by sambb » Mon Jan 12, 2015 8:35 pm

Makes no sense to stay at EJ. However, you still could have done quite well with EJ; just not as well as indexing in the long term. It has been a long bull run, and if EJ had you invested you probably did alright. Nothing wrong with moving to vanguard however.
Last edited by sambb on Mon Jan 12, 2015 8:37 pm, edited 1 time in total.

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Coyote
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Re: Dazed, Confused and Upset

Post by Coyote » Mon Jan 12, 2015 8:35 pm

Is there any reason why it would make any sense to stay with EJ?
No, you've already figured out that you don't want to stay with EJ, and you know why (high fees, wrong types of investments)

Move what you can in kind (ie, don't sell at EJ if Vanguard will take them). Sell at Vanguard, move to what your plan tells you (ie, 60/40 stocks, etc). Don't stay out of the market as you can miss some of the big swings we've been having...

Watch out if you have taxable money with large gains (probably not at EJ :happy )

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Re: Dazed, Confused and Upset

Post by livesoft » Mon Jan 12, 2015 8:36 pm

imdone42 wrote:Is there any reason why it would make any sense to stay with EJ?
Welcome to the forum. I like that your first question is really a trick question. :)

If you have a taxable account, you may have to pay some taxes when you sell assets with gains. It is probably worth it though. How good are you with a Form 1040 and Schedule D?
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Toons
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Re: Dazed, Confused and Upset

Post by Toons » Mon Jan 12, 2015 8:36 pm

"Is there any reason why it would make any sense to stay with EJ?

I can't think of one :happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

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Re: Dazed, Confused and Upset

Post by ruralavalon » Mon Jan 12, 2015 8:41 pm

In my opinion there is no good reason to stay with EJ.

Vanguard can help you with the transfers.

For any taxable account, ask them about a "transfer in kind" so that there on no taxes due just because of the transfer.

For accounts like IRAs you want a "trustee to trustee" transfer, so that the money does not pass thru you and risk a taxable event.
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Wildebeest
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Re: Dazed, Confused and Upset

Post by Wildebeest » Mon Jan 12, 2015 8:46 pm

This post is like blood in water for Bogleheads. We go crazy.

Your broker will retire better than you do on the money they "invest for you".

Run as fast as you can from Edward Jones. They are not your friend and know less about investing that you do but they do now how to seperate you from your money in more ways you can only guess about.

Make sure that investments are transferred in kind to e.g. Vanguard.

Good luck on an happy and rewarding investing life.
The Golden Rule: One should treat others as one would like others to treat oneself.

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imdone42
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Re: Dazed, Confused and Upset

Post by imdone42 » Mon Jan 12, 2015 9:21 pm

Wow! Thanks for all of the quick replies! I feel like I need to apologize for the tone of my first post. I don't want to be the new guy who is all wound up and ranting about how bad he got taken advantage of. I am mad enough to spit nails but I am trying to remain calm! Nevertheless I appreciate all of the responses. I am feeling a little sick about all of the amount of money I have donated to EJ over the years. Thanks to Sammbb for telling me that I may have done okay with EJ. That statement actually washed a little salt out of the wound!

I hate to even think of what this education has cost me. I honestly think that my advisor thinks he is doing the right thing and has no idea how bad the company he works for screws their customers.

Does anyone have any pointers on how to have the conversation with the EJ advisor and what that conversation should entail? I do know that I wouldn't have to talk to him at all but that just wouldn't be right in this type of situation. He is a distant relation and very close family friend whom I have referred a lot of business to.

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Re: Dazed, Confused and Upset

Post by 2b2 » Mon Jan 12, 2015 9:30 pm

I would let Vanguard do the transfer into the funds of your choosing.
Afterward, you can write a nice letter to the EJ advisor and tell him exactly why you left him.

2b2

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Wildebeest
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Re: Dazed, Confused and Upset

Post by Wildebeest » Mon Jan 12, 2015 9:34 pm

imdone42 wrote:Wow! Thanks for all of the quick replies! I feel like I need to apologize for the tone of my first post. I don't want to be the new guy who is all wound up and ranting about how bad he got taken advantage of. I am mad enough to spit nails but I am trying to remain calm! Nevertheless I appreciate all of the responses. I am feeling a little sick about all of the amount of money I have donated to EJ over the years. Thanks to Sammbb for telling me that I may have done okay with EJ. That statement actually washed a little salt out of the wound!

I hate to even think of what this education has cost me. I honestly think that my advisor thinks he is doing the right thing and has no idea how bad the company he works for screws their customers.

Does anyone have any pointers on how to have the conversation with the EJ advisor and what that conversation should entail? I do know that I wouldn't have to talk to him at all but that just wouldn't be right in this type of situation. He is a distant relation and very close family friend whom I have referred a lot of business to.
I would suggest that you say that you ran into a major financial logjam and need all the money you can get your hands on so that you can survive and ask him if he can lend you some money and that it too painful to talk about.

Please do not send anymore business to this "distant relation and close family friend" unless you wish them ill.
Last edited by Wildebeest on Mon Jan 12, 2015 9:46 pm, edited 2 times in total.
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Re: Dazed, Confused and Upset

Post by GerryL » Mon Jan 12, 2015 9:35 pm

imdone42 wrote: Does anyone have any pointers on how to have the conversation with the EJ advisor and what that conversation should entail? I do know that I wouldn't have to talk to him at all but that just wouldn't be right in this type of situation. He is a distant relation and very close family friend whom I have referred a lot of business to.
If you feel you must have a conversation with the EJ advisor, simply say you've been learning about low-cost passive investing and have decided to take responsibility for your own portfolio. No details. No apologies. If he wants to discuss further, simply thank him for his help and repeat (as often as needed) "No thank you. I'm good."

You may have lost money overpaying for "services" but you can stop kicking yourself. 1) Everyone makes mistakes. 2) You can't turn back the clock. 3) You are young enough that you still have time on your side. Good luck.

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ResearchMed
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Re: Dazed, Confused and Upset

Post by ResearchMed » Mon Jan 12, 2015 9:36 pm

imdone42 wrote:Wow! Thanks for all of the quick replies! I feel like I need to apologize for the tone of my first post. I don't want to be the new guy who is all wound up and ranting about how bad he got taken advantage of. I am mad enough to spit nails but I am trying to remain calm! Nevertheless I appreciate all of the responses. I am feeling a little sick about all of the amount of money I have donated to EJ over the years. Thanks to Sammbb for telling me that I may have done okay with EJ. That statement actually washed a little salt out of the wound!

I hate to even think of what this education has cost me. I honestly think that my advisor thinks he is doing the right thing and has no idea how bad the company he works for screws their customers.

Does anyone have any pointers on how to have the conversation with the EJ advisor and what that conversation should entail? I do know that I wouldn't have to talk to him at all but that just wouldn't be right in this type of situation. He is a distant relation and very close family friend whom I have referred a lot of business to.
Your last sentence obviously makes this a lot more tricky than if this had been a "regular" business relationship with someone who was otherwise a stranger.

But I think most others will agree (from similar queries in the past) that it won't do much good (if any) trying to "have the talk". He'll have NO goal but to try to get you to stick with him and EJ, whether or not he "truly believes" it is in your best interest. It IS in HIS best interest.
<someone can add Upton Sinclair quote here, please>

Possible the easiest solution is to contact someone at Vanguard and have them help you initiate the transfer by "pulling" the money from EJ to Vanguard, rather than trying to "push" the money from EJ to Vanguard.
Really, all that it takes is your permission and signed documents.

And yes, try as much as possible to transfer "in kind", unless there are holdings that simply cannot be transferred to Vanguard. You might need to liquidate those, but there could be tax consequences. If these are heavy taxes, you might first check if there is a second place you could transfer them (Schwab?) and let them sit without selling for a while until you sort out a longer-term plan with Vanguard.

Good luck.
And hard as it is, try not to swallow too many of those nails you are spitting.
Many of us have "learned the hard way", and would also love a chance for a do-over years ago.
Best thing is, you've figured out what this was costing you now, and you can move forward in a much better financial position/future.

RM
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zebrafish
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Re: Dazed, Confused and Upset

Post by zebrafish » Mon Jan 12, 2015 9:37 pm

There aren't a lot of people around here who haven't made financial mistakes of some kind. If they say they haven't, they're probably lying. As Freddy Mercury says, "And bad mistakes. I've made a few". All I have to say is dot com bubble. Fortunately, I the money I lost was chump change based on where my career was at the time. But that was my wake up call.

If the EJ advisor has been involved with you for some time and is a (distant) family relation, you owe them some sort of personal correspondence-- letter, email, phone call, in-person visit-- something. I would keep it professional and courteous. Take the high road. If you talk to them on the phone or in-person, then don't allow them to change your mind, as it is likely that the person will try and keep your account. Certainly, you can thank them for the service they have provided you. There is no need to bash them, but certainly don't be afraid to be honest if they ask why you are leaving (high fees, different investment philosophy, whatever...).

As the previous poster suggested, you could also do this after the transfer is made.

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Upton Sinclair quote

Post by Taylor Larimore » Mon Jan 12, 2015 10:35 pm

<someone can add Upton Sinclair quote here, please>
ResearchMed:

Upton Sinclair wrote: "It is difficult to get a man to understand something, when his salary depends on his not understanding it."

This is an absolute truth which every investor should understand and be aware of.

Thank you for the reminder.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: Dazed, Confused and Upset

Post by lack_ey » Mon Jan 12, 2015 10:58 pm

For what it's worth I think EJ probably does better for its customers than many of them trying to invest themselves. Sure, you pay them a lot but that's better than churning a portfolio like butter chasing yesterday's winners, being way too conservative, or something along those lines.

imdone42 wrote:Does anyone have any pointers on how to have the conversation with the EJ advisor and what that conversation should entail? I do know that I wouldn't have to talk to him at all but that just wouldn't be right in this type of situation. He is a distant relation and very close family friend whom I have referred a lot of business to.
I don't have any personal experience or good insight into this, but I would suggest keeping the message relatively brief and focusing on your new desire to be a DIY investor and handle your money yourself. Investing style and fee structure are more contentious issues. Thank him for handling the money as long as he did. Seven figures assets at age 42 in the 28% bracket probably ain't too shabby, anyhow.

And as others have suggested, I would start the transfer process from the other side, the company getting the funds transferred in.

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Re: Dazed, Confused and Upset

Post by BigJohn » Mon Jan 12, 2015 11:11 pm

lack_ey wrote:For what it's worth I think EJ probably does better for its customers than many of them trying to invest themselves. Sure, you pay them a lot but that's better than churning a portfolio like butter chasing yesterday's winners, being way too conservative, or something along those lines.
Maybe an isolated case but I'll disagree on this point. They had my parents (both in their mid-80s) at an asset allocation of 80/20 when they can ill afford a loss of capital due to growing LTC costs. When I tried to work with him on something more conservative, he then had the audacity to argue with me about how dangerous bonds where when interest rates rise and that stocks were really a more conservative investment.

Sorry for the rant, still makes me mad every time I think about it or hear the company name :x

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Re: Dazed, Confused and Upset

Post by island » Mon Jan 12, 2015 11:54 pm

I'm not a fan of E.J., and have never used them, but regarding "hiding" fees, I doubt that. I think it's more that investors don't ask, question, or read anything when they don't know enough. It's all spelled out if you look up the funds you're investing in, but most don't and dive in blindly.
I speak from experience from when I purchased American Funds without knowledge many years ago and still have them due to tax consequences. Can't blame anyone, but myself and I suggest you do the same. Get ticked off, but be happy you learned about Vanguard and move on. More importantly vow to learn as much as you can.

I only discovered this site in 2013 and there are so many knowledgable contributors who are extremely helpful and willing to share their expertise. It's amazing. Glad you found this site too!

Good for you and good luck.

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Re: Dazed, Confused and Upset

Post by lack_ey » Tue Jan 13, 2015 12:10 am

BigJohn wrote:
lack_ey wrote:For what it's worth I think EJ probably does better for its customers than many of them trying to invest themselves. Sure, you pay them a lot but that's better than churning a portfolio like butter chasing yesterday's winners, being way too conservative, or something along those lines.
Maybe an isolated case but I'll disagree on this point. They had my parents (both in their mid-80s) at an asset allocation of 80/20 when they can ill afford a loss of capital due to growing LTC costs. When I tried to work with him on something more conservative, he then had the audacity to argue with me about how dangerous bonds where when interest rates rise and that stocks were really a more conservative investment.

Sorry for the rant, still makes me mad every time I think about it or hear the company name :x
By "many" I mean literally "many" and did not venture out to a percentage-based assessment like "most." They have a lot of clients. That was probably not the best way to word things, though...

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Re: Dazed, Confused and Upset

Post by HurdyGurdy » Tue Jan 13, 2015 12:16 am

Are these in an IRA? EJ also charges you $40/year for that -- deducting it the first of the year. And $95 for taking the money out.

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Re: Dazed, Confused and Upset

Post by DualIncomeNoDebt » Tue Jan 13, 2015 12:23 am

[OT comment removed by admin LadyGeek]

abyan
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Re: Dazed, Confused and Upset

Post by abyan » Tue Jan 13, 2015 12:27 am

Well, as for adviser not "hiding fees"...

Sure, they tell you the fees at the beginning, and you hear 1-point-something percent and think that means 1% rather than 1/3 to 2/3 of your return gone. And in my case, sure my adviser (who was not with EJ) sent a letter every time he made a trade, and every separate letter detailed the transaction cost (which I thought was what everyone pays to buy and sell stocks and funds, that it was part of the cost from the stock itself). But as I learned working in Washington, sometimes the best way to hide the truth is to give people as many documents as you can. And by year 20, when you're getting 5 letters a month, each detailing a fee, you start to zone out, while having no sense of the cumulative cost.

And here's the kicker: neither my former adviser, nor RBC, detail the cumulative fees anywhere. You simply can't get the tally. It's not on your monthly statement. It's not in RBC's web site. You have to keep every letter of every transaction and tally them all up to get your total fees. It took Vanguard on the phone with me an hour to figure out where RBc slipped the fees into my balance sheet.

Want to know what RbC does? They take the money out of your account, show you a lower balance, but don't actually have a line item for the fee. So you don't realize it's disappearing from your balance sheet. That my friends is scummy as all get out. For example, they show that you bought x shares, show the price per share, then show the total. The total is actually 1.75% less than it should be, but they don't have a line item for the 1.75%. So you have no actual record of the fee, and cannot tally them.

It's a despicable business.

PS imdone42, it's been 7 months and I'm still spitting nails about it. So trust me, we all feel your pain. Just politely tell your relative you've decided you want to handle your own investments, and thanks so much.

macheta
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Re: Dazed, Confused and Upset

Post by macheta » Tue Jan 13, 2015 12:52 am

I wonder why they don't have more regulation around this type of business.

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Re: Dazed, Confused and Upset

Post by Dale_G » Tue Jan 13, 2015 12:56 am

imdone42 wrote:Does anyone have any pointers on how to have the conversation with the EJ advisor and what that conversation should entail? I do know that I wouldn't have to talk to him at all but that just wouldn't be right in this type of situation. He is a distant relation and very close family friend whom I have referred a lot of business to.
I recommend a short note or conversation with the advisor after the move has been completed. But that is the easy part. What do you tell the people who you referred to him? :(

It is water over the dam, and you made the best decisions based on your knowledge at the time. But after a bit of time goes by, you might want to tell those you sent to EJ about this, "great new fund family I found".

Best of luck,

Dale
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Re: Upton Sinclair quote

Post by cromwell » Tue Jan 13, 2015 1:15 am

Taylor Larimore wrote:
<someone can add Upton Sinclair quote here, please>
ResearchMed:

Upton Sinclair wrote: "It is difficult to get a man to understand something, when his salary depends on his not understanding it."

This is an absolute truth which every investor should understand and be aware of.

Thank you for the reminder.

Best wishes.
Taylor
Ditto Taylor's quote .Your current advisor will have difficulty accepting logic that is contrary to his pay so I would keep it simple and direct Vanguard to pull monies out of your current accounts after you understand any tax implications.I was in a similar position to you with another high cost manager/ broker 8 yrs ago and switched it all over to Vanguard within about 2 months.It turned out fine and I am gratified by the experience. I too would be wealthier if I had discovered Bogleheadism sooner but I didnt and thats reality.I was also 30 yrs older than you.So be of good cheer and most importantly be patient.In investing the turtle frequently wins over the hare.All good wishes to you.

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Re: Dazed, Confused and Upset

Post by BigJohn » Tue Jan 13, 2015 1:18 am

lack_ey wrote:By "many" I mean literally "many" and did not venture out to a percentage-based assessment like "most." They have a lot of clients. That was probably not the best way to word things, though...
lack_ey, you worded it appropriately and it's probably true, just struck a nerve. Rant directed at EJ not you.

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Re: Dazed, Confused and Upset

Post by obgyn65 » Tue Jan 13, 2015 5:03 am

I use EJ only to buy CDs and munis, nothing else. I pay zero fees because I keep my current account with them over $2500.
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Re: Dazed, Confused and Upset

Post by IPer » Tue Jan 13, 2015 5:07 am

imdone42 wrote:Wow! Thanks for all of the quick replies! I feel like I need to apologize for the tone of my first post. I don't want to be the new guy who is all wound up and ranting about how bad he got taken advantage of. I am mad enough to spit nails but I am trying to remain calm! Nevertheless I appreciate all of the responses. I am feeling a little sick about all of the amount of money I have donated to EJ over the years. Thanks to Sammbb for telling me that I may have done okay with EJ. That statement actually washed a little salt out of the wound!

I hate to even think of what this education has cost me. I honestly think that my advisor thinks he is doing the right thing and has no idea how bad the company he works for screws their customers.

Does anyone have any pointers on how to have the conversation with the EJ advisor and what that conversation should entail? I do know that I wouldn't have to talk to him at all but that just wouldn't be right in this type of situation. He is a distant relation and very close family friend whom I have referred a lot of business to.
Most rants welcome here, welcome to the forum!

No need for any discussion with the "well meaning" EJ rep. You need to save your energy and spend it on a) determining your asset allocation, b) how to execute what you want on the vanguard side, c) making sure you don't take any abrupt tax hits on your way and so forth, your transfer to Vanguard does not require a discussion with EJ at all, that can and should be handled on the Vanguard side.
Read the Wiki Wiki !

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Re: Dazed, Confused and Upset

Post by IPer » Tue Jan 13, 2015 5:13 am

abyan wrote:Well, as for adviser not "hiding fees"...

Sure, they tell you the fees at the beginning, and you hear 1-point-something percent and think that means 1% rather than 1/3 to 2/3 of your return gone. And in my case, sure my adviser (who was not with EJ) sent a letter every time he made a trade, and every separate letter detailed the transaction cost (which I thought was what everyone pays to buy and sell stocks and funds, that it was part of the cost from the stock itself). But as I learned working in Washington, sometimes the best way to hide the truth is to give people as many documents as you can. And by year 20, when you're getting 5 letters a month, each detailing a fee, you start to zone out, while having no sense of the cumulative cost.

And here's the kicker: neither my former adviser, nor RBC, detail the cumulative fees anywhere. You simply can't get the tally. It's not on your monthly statement. It's not in RBC's web site. You have to keep every letter of every transaction and tally them all up to get your total fees. It took Vanguard on the phone with me an hour to figure out where RBc slipped the fees into my balance sheet.

Want to know what RbC does? They take the money out of your account, show you a lower balance, but don't actually have a line item for the fee. So you don't realize it's disappearing from your balance sheet. That my friends is scummy as all get out. For example, they show that you bought x shares, show the price per share, then show the total. The total is actually 1.75% less than it should be, but they don't have a line item for the 1.75%. So you have no actual record of the fee, and cannot tally them.

It's a despicable business.

PS imdone42, it's been 7 months and I'm still spitting nails about it. So trust me, we all feel your pain. Just politely tell your relative you've decided you want to handle your own investments, and thanks so much.
Years ago I had a batch of Mutual Funds that did their fees like this. I had no freaking clue! What's worse is I had my father convert his to that brokerage and he had a 300% performance increase because he moved at my request! About 12 years ago I started reading the Vanguard Die Hards over on Morningstar I guess they shifted here
mostly, and learned of my doings in detail, yuck! I cannot say the fees were completely hidden but I also cannot say it was a "custom" of the brokerage to reveal the meaning of things (that reads ALL things related to my account and investments). They wanted their customers to remain loyal and without a clue! Well hopefully those
days are swiftly coming to an end.
Read the Wiki Wiki !

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Re: Dazed, Confused and Upset

Post by kenner » Tue Jan 13, 2015 6:12 am

There is no obligation whatsoever for any investor to discuss a change in course of this type with any financial advisor. From every standpoint, you are the boss, they are the employee. If you feel that your relationship with this distant relative requires contact, simply tell him you can invest your money at Vanguard, Fidelity or T. Rowe Price for "x" total cost and politely ask him if he can match that cost. If he loves and respects you and your family, he will match the lower cost. If he cannot do that, you are home free.

It all boils down to whether you want to enrich his family or yours.

TomTX
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Re: Dazed, Confused and Upset

Post by TomTX » Tue Jan 13, 2015 7:41 am

I would call up Vanguard Concierge services (with EJ statement/account info in hand) and have them initiate the transfer.

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Re: Dazed, Confused and Upset

Post by Dandy » Tue Jan 13, 2015 7:53 am

We usually learn little about investing in school. The media often makes investing seem exciting, challenging and kind of leads us to use a professional. For some even the basics of investing seem hard -- but you really don't need a degree in finance to invest wisely -- just some time a patience.

There are wonderful and inexpensive all in one funds for those who don't have the time or inclination to get too involved in investing.

So, you don't need to have a broker or make a lot of decisions about what to invest in. And you can save a bundle.

This forum is an excellent way to get the level of guidance you need.

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Re: Dazed, Confused and Upset

Post by sambb » Tue Jan 13, 2015 8:05 am

We dont know much about the individual investments, but if the Original poster was with EJ and in decent stock funds, they likely did obtain a fairly good return in the last few years. Sure, the fees eat into it, but if the money was invested appropriately (even with fees), the person may have done alright. Yes, i agree with transfer to vanguard, but even full service high fee brokerages can do ok in the bull market. Certainly not as well as indexing over the long term, but also not poorly either.

I would rather have money in EJ stock funds than in money market with vanguard in the last 5 years. So asset allocation is critical.

Clearly i agree with everyone here, to transfer funds to vanguard. But for short periods of time in bull markets, most investors can do alright in stock funds. Maybe not as well as indexing, but hopefully far better than money market or cash.

I am not a fan of full service brokers, and I am not trying to justify their existence at all. But hopefully the OP obtained a decent return and partially participated in the bull market, even if they would not have fully reaped the rewards. Now move to vanguard and reap the rewards, and accept the downsides also.

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Re: Dazed, Confused and Upset

Post by FuzzyButtons » Tue Jan 13, 2015 8:23 am

I convinced my gf to move her holdings from EJ earlier this year. Just like the OP, the funds she was in were 5.75% front end load, and over 1% ER. But it took awhile going through the statements to figure out where that front end load was being assessed. As others have said, it wasn't a line item.

In the case of her funds, it appeared as an inflation of the stock price. So if the shares were trading at $100, her statement showed a purchase of x shares at $105.75. If you just looked at the statement, you'd think all of your money ended up in the mutual fund. It's only if you go online and look up the historical price of that fund on that day that you realize the fee was "baked in".

Like others have said, OP - don't worry about it. The most important parts of wealth building are living below your means, asset allocation, and finally fees. Sounds like you've hit two out of three really well, and now you can look forward to covering the last base too! :beer

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Re: Dazed, Confused and Upset

Post by ruralavalon » Tue Jan 13, 2015 8:54 am

GerryL wrote:
imdone42 wrote: Does anyone have any pointers on how to have the conversation with the EJ advisor and what that conversation should entail? I do know that I wouldn't have to talk to him at all but that just wouldn't be right in this type of situation. He is a distant relation and very close family friend whom I have referred a lot of business to.
If you feel you must have a conversation with the EJ advisor, simply say you've been learning about low-cost passive investing and have decided to take responsibility for your own portfolio. No details. No apologies. If he wants to discuss further, simply thank him for his help and repeat (as often as needed) "No thank you. I'm good."

You may have lost money overpaying for "services" but you can stop kicking yourself. 1) Everyone makes mistakes. 2) You can't turn back the clock. 3) You are young enough that you still have time on your side. Good luck.
+ 1

You can thank him for his services and say that you believe you now know enough to manage on your own. No need to bring up fees or loads unless he presses for a more detailed reason.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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Re: Dazed, Confused and Upset

Post by MossySF » Tue Jan 13, 2015 9:27 am

What's past is past. Yeah, if you could go back in time and switch to Vanguard funds, you'd save on the 6% load and 1% annual expenses but you still earned an okay return. (EJ is a costly service compared to Vanguard do-it-yourself options but would be considered cheap compared to insurance salesmen peddling high cost annuities/whole life.) And if you could go back in time, there'd probably be many other decisions you'd take back with a much bigger impact.

Just have Vanguard do the transfer paperwork and initiate it on their end. If your EJ rep sees it and asks you about it, reply you're ready to manage your own investments now and that's that.

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Re: Dazed, Confused and Upset

Post by rustymutt » Tue Jan 13, 2015 9:46 am

bluejello wrote:
Is there any reason why it would make any sense to stay with EJ?
Nope! Congrats on taking the red pill. :sharebeer

plus one :sharebeer
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Re: Dazed, Confused and Upset

Post by pkcrafter » Tue Jan 13, 2015 9:59 am

obgyn65 wrote:I use EJ only to buy CDs and munis, nothing else. I pay zero fees because I keep my current account with them over $2500.
Zero fees?? Are you buying individual munis? Do you know what the transaction fees are?

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

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Re: Dazed, Confused and Upset

Post by tacster » Tue Jan 13, 2015 11:00 am

macheta wrote:I wonder why they don't have more regulation around this type of business.
Largely because these businesses employ lobbyists to prevent such regulations from being passed.
INSERT PITHY QUOTE HERE

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Re: Dazed, Confused and Upset

Post by M_to_the_G » Tue Jan 13, 2015 11:05 am

Next time you visit your advisor in his stately mahogany office, do admire the woodwork and compliment him on it, as well as on his watch and his car. You could add a “You're welcome,” too. After all, you paid for all of it.
"It’s basically the plot of 'Charlie and the Chocolate Factory.' If you stick around, doing nothing, while everyone around you ****s up, you’re going to win big." - John Oliver

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Re: Dazed, Confused and Upset

Post by Novine » Tue Jan 13, 2015 11:22 am

"Does anyone have any pointers on how to have the conversation with the EJ advisor and what that conversation should entail? I do know that I wouldn't have to talk to him at all but that just wouldn't be right in this type of situation. He is a distant relation and very close family friend whom I have referred a lot of business to."

After you talk to him, are you going to contact all the people you referred to him? Sounds like he really maximized the EJ model. Normally, it's the salespeople masquerading as financial advisors who have to talk their friends and family into investing with EJ. In this case, it sounds like you did all the work for him. Did you at least get a referral fee for that work?

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Re: Dazed, Confused and Upset

Post by Pops1860 » Tue Jan 13, 2015 11:34 am

FuzzyButtons wrote:I convinced my gf to move her holdings from EJ earlier this year. Just like the OP, the funds she was in were 5.75% front end load, and over 1% ER. But it took awhile going through the statements to figure out where that front end load was being assessed. As others have said, it wasn't a line item.

In the case of her funds, it appeared as an inflation of the stock price. So if the shares were trading at $100, her statement showed a purchase of x shares at $105.75. If you just looked at the statement, you'd think all of your money ended up in the mutual fund. It's only if you go online and look up the historical price of that fund on that day that you realize the fee was "baked in".
+1

Except, in my case, it was associated with Merrill Lynch, and helping a relative (sibling) understand what they were doing with her investments. In addition to the technique FuzzyButtons notes, in other cases ML put several thousands of $$ for 'commissions' in fine print below the line item statement, effectively making it hard to find these charges as well. Once she saw what was going on, she did fairly quickly move everything to Vanguard, including some 'in kind' transfers that would have triggered tax consequences if cashed out. So, agree with responses above, get Vanguard to help initiate the transfers, and things should work out OK.
The power of accurate observation is often called cynicism by those who do not have it. ~George Bernard Shaw

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Re: Dazed, Confused and Upset

Post by StormShadow » Tue Jan 13, 2015 11:48 am

M_to_the_G wrote:Next time you visit your advisor in his stately mahogany office, do admire the woodwork and compliment him on it, as well as on his watch and his car. You could add a “You're welcome,” too. After all, you paid for all of it.
My advice... don't bother talking to the advisor. You've made him enough money and all he will do is try to smooth talk you into staying.

"Transfer-in-kind" the funds over to Vanguard. I wouldn't immediately make huge adjustments to the portfolio once they move to Vanguard. First, read up on investing (bogleheads is a great place to start) and the basics of asset allocation. When you feel comfortable to make an informed decision, then start to reallocate.

Try not to get beat up thinking about the fees. Its happened to many of us. Consider the expenses you paid as tuition for your financial education. At least you caught it now, instead of 20+ years later. Welcome to bogleheads. :beer

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Re: Dazed, Confused and Upset

Post by jimishooch » Tue Jan 13, 2015 11:58 am

imdone42 wrote:Wow! Thanks for all of the quick replies! I feel like I need to apologize for the tone of my first post. I don't want to be the new guy who is all wound up and ranting about how bad he got taken advantage of. I am mad enough to spit nails but I am trying to remain calm! Nevertheless I appreciate all of the responses. I am feeling a little sick about all of the amount of money I have donated to EJ over the years. Thanks to Sammbb for telling me that I may have done okay with EJ. That statement actually washed a little salt out of the wound!

I hate to even think of what this education has cost me. I honestly think that my advisor thinks he is doing the right thing and has no idea how bad the company he works for screws their customers.

Does anyone have any pointers on how to have the conversation with the EJ advisor and what that conversation should entail? I do know that I wouldn't have to talk to him at all but that just wouldn't be right in this type of situation. He is a distant relation and very close family friend whom I have referred a lot of business to.
I left Edward jones about 2 years ago,

I would have the conversation before transferring and find out if there is going to be any fees in closing the account down, there was for me but minimal. EJ can't compete with vanguard and your advisor "should" know that...

good luck
jim

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Re: Dazed, Confused and Upset

Post by dgdevil » Tue Jan 13, 2015 12:10 pm

macheta wrote:I wonder why they don't have more regulation around this type of business.
1) You can't regulate consumer greed/gullibility;

2) We're already snowed under with paperwork. The truth is in there, somewhere.

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Re: Dazed, Confused and Upset

Post by FelixTheCat » Tue Jan 13, 2015 12:13 pm

The only reason to stay with those fees is to make EJ richer. Go Vanguard, invest in indexes and become a Boglehead.
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Re: Dazed, Confused and Upset

Post by tc101 » Tue Jan 13, 2015 12:16 pm

You don't need to say a word to EJ. Just contact Vanguard and they will handle everything. Someone from EJ will probably call you. You can talk to them if you want, or just tell them you don't want to talk and hang up. If EJ delays the transfer in any way, make one call and tell them you are going to contact the BBB and whatever state agency handles such complaints if all funds are not transferred in a week. They will probably make some excuse. This happened to me. Don't bother to call them again and again and listen to more excuses about why the transfer has been delayed another time. Just find out which agency in your state handles these complaints and file a complaint.
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Re: Dazed, Confused and Upset

Post by Sbashore » Tue Jan 13, 2015 12:32 pm

tc101 wrote:You don't need to say a word to EJ. Just contact Vanguard and they will handle everything. Someone from EJ will probably call you. You can talk to them if you want, or just tell them you don't want to talk and hang up. If EJ delays the transfer in any way, make one call and tell them you are going to contact the BBB and whatever state agency handles such complaints if all funds are not transferred in a week. They will probably make some excuse. This happened to me. Don't bother to call them again and again and listen to more excuses about why the transfer has been delayed another time. Just find out which agency in your state handles these complaints and file a complaint.
This is good advice. Although I have never been with EJ, I've transferred other assets from other institutions and seen the foot dragging. Publicity is a powerful motivator.
Steve | Semper Fi

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Re: Dazed, Confused and Upset

Post by island » Tue Jan 13, 2015 12:38 pm

Pops1860 wrote:
FuzzyButtons wrote:I convinced my gf to move her holdings from EJ earlier this year. Just like the OP, the funds she was in were 5.75% front end load, and over 1% ER. But it took awhile going through the statements to figure out where that front end load was being assessed. As others have said, it wasn't a line item.

In the case of her funds, it appeared as an inflation of the stock price. So if the shares were trading at $100, her statement showed a purchase of x shares at $105.75. If you just looked at the statement, you'd think all of your money ended up in the mutual fund. It's only if you go online and look up the historical price of that fund on that day that you realize the fee was "baked in".
+1

Except, in my case, it was associated with Merrill Lynch, and helping a relative (sibling) understand what they were doing with her investments. In addition to the technique FuzzyButtons notes, in other cases ML put several thousands of $$ for 'commissions' in fine print below the line item statement, effectively making it hard to find these charges as well. Once she saw what was going on, she did fairly quickly move everything to Vanguard, including some 'in kind' transfers that would have triggered tax consequences if cashed out. So, agree with responses above, get Vanguard to help initiate the transfers, and things should work out OK.
Jez, if what you guys, abyan, and OP post is accurate about fees really being THAT hidden (rather than, come on, it's not at least partially because you didn't think about it or read about the funds you bought??), then all commissioned advisors and fund companies are NOT the same.

I'm not here to defend them nor would I use a commissioned advisor again, but when I bought American Funds years ago from an advisor who I think only sold AF, I did not pay an annual fee and he was upfront about the loads and that they translated to commissions for services rendered.

I'm getting a service, I pay, I expect that and I knew.

I just didn't think fees mattered that much and probably didn't know I had any other options for getting my hands on mutual funds. Did I? Were there many options otherwise in the 1990's? They certainly weren't shouting about index funds from the rooftops or Money magazine, but if so and I missed it, I own that; no victim mentality here. I didn't know squat and didn't do much to change that until the past few years.

Also, even though I probably never read a fund prospectus or even looked up a fund on Morningstar, etc until a few years ago, every transaction from day one shows up on my American Funds online account. No deception there either. Cap gains, divs, tax, sales charges, etc going back to the beginning when I first purchased in 1995 or so in an easy to understand format, like a check book. Every sales charge is listed by % and dollar amount with a big fat minus sign in front of it with every sales transaction. And the ER is pretty noticeable too. I'd have to be blind to miss those things.

And if I really feel like being maudlin I can click on a tab to view the grand total of those sales charges just like I can for balances, divs, etc. :oops:
Viewing that was painful at one time, but serves me right for owning these funds for decades and not looking! I'm over that now and focus on the balance instead of what it could have been if I didn't have those fees. It could have been worse, like if I never invested in the first place or pulled out in '08 and 2000-whatever. Ignorance served me well then!

Believe me though, I'd probably cash out and move to my other account at Vanguard for lower ERs if I didn't have the tax consequence (working on it), but at least I'm not saddled with an annual fee like the OP.

i guess I should consider myself lucky for not stumbling into Ed Jones, Merrill Lynch, etc if they are as deceptive as reported. :annoyed

Good luck OP!

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