Edward Jones or Vanguard?
Edward Jones or Vanguard?
Hi Bogleheads,
I would like to thank the Boglehead community for the incredible amount of wisdom you all share so generously. The insights I have gotten and all that I have learned from this forum have completely shaped my investment philosophy, and will no doubt save me a tremendous amount of money over my lifetime. Thank you to all of the sages who have made rational, sensible, low cost investing so much easier to understand for the rest of us.
I would like to try to pay it forward, but would do so with caution, as I am no expert.
My mother-in-law has her retirement account with Edward Jones. She is a very sweet and trusting woman, and she has little to no confidence in her ability to manage her investments. She likes that with Edward Jones, she can sit across the table with someone who will tell her that everything is under control, and that they will do everything for her.
I know that with Vanguard you can’t sit with someone in person, but I would very much like to get some insight about Vanguard’s 0.3% advisory service, and whether or not it can do pretty much everything else for her that Edward Jones does. Is this service right for anyone who needs complete portfolio management, or might some find the service to be lacking? I don’t want her to leave Edward Jones, only for her to wind up feeling alone and overwhelmed.
Comments for and against the move are more than welcome.
Thank you!
I would like to thank the Boglehead community for the incredible amount of wisdom you all share so generously. The insights I have gotten and all that I have learned from this forum have completely shaped my investment philosophy, and will no doubt save me a tremendous amount of money over my lifetime. Thank you to all of the sages who have made rational, sensible, low cost investing so much easier to understand for the rest of us.
I would like to try to pay it forward, but would do so with caution, as I am no expert.
My mother-in-law has her retirement account with Edward Jones. She is a very sweet and trusting woman, and she has little to no confidence in her ability to manage her investments. She likes that with Edward Jones, she can sit across the table with someone who will tell her that everything is under control, and that they will do everything for her.
I know that with Vanguard you can’t sit with someone in person, but I would very much like to get some insight about Vanguard’s 0.3% advisory service, and whether or not it can do pretty much everything else for her that Edward Jones does. Is this service right for anyone who needs complete portfolio management, or might some find the service to be lacking? I don’t want her to leave Edward Jones, only for her to wind up feeling alone and overwhelmed.
Comments for and against the move are more than welcome.
Thank you!
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Re: Edward Jones or Vanguard?
I don't have any experience with using any advisor including Vanguard so I can't give a helpful answer. Just wanted to say that I think you might get more responses if you could tell us a little about your MIL's financial situation. Is she on a tight budget?... or does she have plenty of income so she can afford to pay EJ a third of it in fees with no problem?
This gives our ideal format for asking questions. viewtopic.php?f=1&t=6212
Welcome to the forum.
JW
This gives our ideal format for asking questions. viewtopic.php?f=1&t=6212
Welcome to the forum.
JW
Last edited by JW-Retired on Tue Jan 19, 2016 2:24 pm, edited 1 time in total.
Retired at Last
Re: Edward Jones or Vanguard?
Your mother in law sounds like a salesman's dream. Yes, Vanguard's Advisory Service can do all of what EJ is doing but much better and much cheaper. But no, they can't satisfy that psychological need she has of sitting across the table from the salesman.develop wrote:Hi Bogleheads,
I would like to thank the Boglehead community for the incredible amount of wisdom you all share so generously. The insights I have gotten and all that I have learned from this forum have completely shaped my investment philosophy, and will no doubt save me a tremendous amount of money over my lifetime. Thank you to all of the sages who have made rational, sensible, low cost investing so much easier to understand for the rest of us.
I would like to try to pay it forward, but would do so with caution, as I am no expert.
My mother-in-law has her retirement account with Edward Jones. She is a very sweet and trusting woman, and she has little to no confidence in her ability to manage her investments. She likes that with Edward Jones, she can sit across the table with someone who will tell her that everything is under control, and that they will do everything for her.
I know that with Vanguard you can’t sit with someone in person, but I would very much like to get some insight about Vanguard’s 0.3% advisory service, and whether or not it can do pretty much everything else for her that Edward Jones does. Is this service right for anyone who needs complete portfolio management, or might some find the service to be lacking? I don’t want her to leave Edward Jones, only for her to wind up feeling alone and overwhelmed.
Comments for and against the move are more than welcome.
Thank you!
Re: Edward Jones or Vanguard?
develop-
Take a look at this other current forum thread on Edward Jones -
"Edward Jones" www.bogleheads.org/forum/viewtopic.php?f=1&t=182407
Take a look at this other current forum thread on Edward Jones -
"Edward Jones" www.bogleheads.org/forum/viewtopic.php?f=1&t=182407
- InvestorNewb
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Re: Edward Jones or Vanguard?
The decision is very simple. If you want to pay exorbitant fees, go with Edward Jones. If you don't, go with Vanguard.
My Portfolio: VTI [US], VXUS [Int'l], VNQ [REIT], VCN [Canada] (largest to smallest)
- Clever_Username
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Re: Edward Jones or Vanguard?
Well, consider where you're asking. I always recommend Vanguard over just about any other provider (the TSP is a notable exception and is not an option here) from a financial point of view
However, there are two hazards, both in the relationships angle here: first, you might inherit the "tell her everything's okay" role, and second, you might also get the blame for any market conditions that lead to losses if she believes that EJ would have avoided them better than Vanguard did.
However, there are two hazards, both in the relationships angle here: first, you might inherit the "tell her everything's okay" role, and second, you might also get the blame for any market conditions that lead to losses if she believes that EJ would have avoided them better than Vanguard did.
"What was true then is true now. Have a plan. Stick to it." -- XXXX, _Layer Cake_ |
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Re: Edward Jones or Vanguard?
I just left EJ, and I feel that it was the best single financial decision I have ever made. They made it expensive and confusing on the way out, which matched the level of service I received for the past 8 years. It may "feel" good to have a slick salesman come for a visit and tell you half-truths and myopic investment strategies, but in the end she will pay dearly for all that good "feel". If she is sweet and trusting, I'd expect any EJ "advisor" (they are really salesmen for EJ products) to exploit that to his maximum benefit, all while telling your MIL it is really in her best interest.
My guy was sure a helluva nice fella, friendly as a spotted pup, but when it came time to explain fee structure, feduciary obligations, and portfolio expenses the ol' soft shoe shuffle became apparent over time. When he became a little argumentative about it, I knew it was time to leave. I had a mess to clean up in my wife's Advisory Solutions account. What a racket. $135/account to leave EJ. Vanguard charges $0/account if you are not happy. That should say something right there.
I think Vanguard Advisors will do webcam-type meetings. Not the same I know, but for the difference in peace of mind I'd find it a better value. I chose DIY, so I don't have any first-hand experience with VA, but the level of customer service for regular guys like me has been top shelf since I made the switch. Good luck!
My guy was sure a helluva nice fella, friendly as a spotted pup, but when it came time to explain fee structure, feduciary obligations, and portfolio expenses the ol' soft shoe shuffle became apparent over time. When he became a little argumentative about it, I knew it was time to leave. I had a mess to clean up in my wife's Advisory Solutions account. What a racket. $135/account to leave EJ. Vanguard charges $0/account if you are not happy. That should say something right there.
I think Vanguard Advisors will do webcam-type meetings. Not the same I know, but for the difference in peace of mind I'd find it a better value. I chose DIY, so I don't have any first-hand experience with VA, but the level of customer service for regular guys like me has been top shelf since I made the switch. Good luck!
Re: Edward Jones or Vanguard?
Show her a simple bar graph of how much she will have after say 10 years of paying Edward Jones advisory fees + fund fees + whatever other fees are they cooking up for her (load fees, transaction fees, etc.). You would have to probably estimate & annualize the Edward Jones fees to boil them down to an approximate expense ratio. And they may try and do a very good job at hiding them all. Then, add a bar for how much she will have after 10 years at Vanguard with the lower expenses. You can use this tool:
http://www.begintoinvest.com/expense-ratio-calculator/
I find that even people who do not have an inclination for finance or investment, can easily understand the bottom line. They get that. With that information in hand, she can make a much more informed decision about the guy across the table and what value they are really bringing for the money she is spending.
http://www.begintoinvest.com/expense-ratio-calculator/
I find that even people who do not have an inclination for finance or investment, can easily understand the bottom line. They get that. With that information in hand, she can make a much more informed decision about the guy across the table and what value they are really bringing for the money she is spending.
We don't see things as they are, we see things as we are.
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Re: Edward Jones or Vanguard?
Or you can find a middle ground. How about Charles Schwab or Fido? You can do a lot better than EJ cost wise in my opinion. That or find a local fee only advisor that believes in buy and hold index investing. This way she could get lower costs AND have face to face meetings with someone to tell her she is doing things correctly.
Re: Edward Jones or Vanguard?
Hiring someone to sit across a table from you and tell you everything is ok is far and away the greatest expense you will undertake in your life. A priest or rabbi would do it for nothing.
I don't know what is a good way to lead anyone in particular to see that. One illustration is to point out that in retirement people would be spending about 4% of their portfolio every year. If investment costs for advice, fees, expense ratios, brokerage costs inside funds, and so on are about 2%, then Edward Jones is stealing about half her annual income. That is neither a joke nor an exaggeration.
I don't know what is a good way to lead anyone in particular to see that. One illustration is to point out that in retirement people would be spending about 4% of their portfolio every year. If investment costs for advice, fees, expense ratios, brokerage costs inside funds, and so on are about 2%, then Edward Jones is stealing about half her annual income. That is neither a joke nor an exaggeration.
Re: Edward Jones or Vanguard?
RUN, don't walk, from Edward Jones.
cheers ... -Mark |
"Our life is frittered away with detail. Simplify. Simplify." -Henry David Thoreau |
[VTI, VXUS, BND, VTEB, SV fund]
Re: Edward Jones or Vanguard?
OP, there's nothing wrong with the ML's decision to pay for a service--we all do that when we don't feel comfy with the task at hand. Getting her to realize exactly how much she is paying for the service is obviously the key here. I suggest asking her to read Bogle's Little Book of Common Sense Investing. If that doesn't light her fire, nothing ever will.
Re: Edward Jones or Vanguard?
This thread is now in the Investing - Help with Personal Investments forum (portfolio help).
Re: Edward Jones or Vanguard?
This would be my advice if the OP was talking about his own account. Since it is the MIL's account, problems could crop up . I had my late father switch from John Hancock to Vanguard right before the dot com tech crash. He got frustrated a bailed out at the bottom. Though he never said so, I feel he blamed me.avenger wrote:RUN, don't walk, from Edward Jones.
Best Wishes, SpringMan
Re: Edward Jones or Vanguard?
dbr wrote:Hiring someone to sit across a table from you and tell you everything is ok is far and away the greatest expense you will undertake in your life. A priest or rabbi would do it for nothing.
I don't know what is a good way to lead anyone in particular to see that. One illustration is to point out that in retirement people would be spending about 4% of their portfolio every year. If investment costs for advice, fees, expense ratios, brokerage costs inside funds, and so on are about 2%, then Edward Jones is stealing about half her annual income. That is neither a joke nor an exaggeration.
+1
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
Re: Edward Jones or Vanguard?
In order to answer this, you would have to ask her exactly what Edward Jones does for her.develop wrote:I know that with Vanguard you can’t sit with someone in person, but I would very much like to get some insight about Vanguard’s 0.3% advisory service, and whether or not it can do pretty much everything else for her that Edward Jones does.
Get a list. Get a very specific list and people might be able to answer your questions.
For example, if EJ does her taxes, I don't think she would be happy with Vanguard because they are not going to do her taxes for her.
Of course, there is no question (financially) she should move the money, but if she does not feel that her needs are met, the move would be a disaster.
Link to Asking Portfolio Questions
Re: Edward Jones or Vanguard?
I've got the same kind of issue with my mom. She has her tIRA invested with the same firm I used to have, which charges a 2% AUM and probably underperforms TSM even before fees are applied. For me it was a no-brainer to switch, but with her account I have to look at:SpringMan wrote:This would be my advice if the OP was talking about his own account. Since it is the MIL's account, problems could crop up . I had my late father switch from John Hancock to Vanguard right before the dot com tech crash. He got frustrated a bailed out at the bottom. Though he never said so, I feel he blamed me.avenger wrote:RUN, don't walk, from Edward Jones.
1) When I rolled my IRA over to Vanguard, I had to redo the paperwork a couple of times, get a Medallion signature, switch the old IRA to a cash position, and wait for a total of > 30 days to get transferred.
2) Right now she complains all the time about how "that guy" keeps losing her money. If I get her to transfer, I become "that guy".
3) It's a fairly small account relative to her total income stream (lots of rental properties)
So far, it just hasn't been worth the pain (especially #2) to push her to switch. If she decides she's absolutely ready to fire her manager and asks for my help, I'll get her transferred over, but the potential downsides of pushing her to switch outweigh the upside of avoiding the small(ish) amount of fees.
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Re: Edward Jones or Vanguard?
Great approach.dbr wrote: One illustration is to point out that in retirement people would be spending about 4% of their portfolio every year. If investment costs for advice, fees, expense ratios, brokerage costs inside funds, and so on are about 2%, then Edward Jones is stealing about half her annual income. That is neither a joke nor an exaggeration.
Give her The Bogelheads Guide to Investing to help sway her decision and keep using the phrase " why search for a needle when you can buy the haystack"
Re: Edward Jones or Vanguard?
Is your mother-in-law asking for help on her own initiative? Are you willing to be personally responsible for any and all future consequences to her retirement?
Knock Edward Jones all you want. Maybe she is a "salesman's dream." But if an expensive salesman holding her hand at a desk inside a storefront has worked for her so far, then you mess with that at your own peril. Vanguard's discount advisory service is not going to have a nice young man in a suit and tie looking her in the eye and holding her hand for 0.3% a year. You can sneer at that all you want, but that's what some people need. Yes, she would still likely do better with any number of other alternatives, but your advice is unsolicited, you're apt to cause any number of unintended consequences. If she switches to someone else at your initiative who hasn't built up her trust, then loses money and bails out at the worst possible time, she'll blame you, you'll blame her, she'll be out money she wouldn't have been if she hadn't stayed the course, and your relationship will be damaged for no good reason.
Solve your own financial problems, share what works for you when you're asked, and otherwise keep out of others' financial business unless invited (and even then, tread carefully).
I fully concur with Clever_Username and SpringMan.
Knock Edward Jones all you want. Maybe she is a "salesman's dream." But if an expensive salesman holding her hand at a desk inside a storefront has worked for her so far, then you mess with that at your own peril. Vanguard's discount advisory service is not going to have a nice young man in a suit and tie looking her in the eye and holding her hand for 0.3% a year. You can sneer at that all you want, but that's what some people need. Yes, she would still likely do better with any number of other alternatives, but your advice is unsolicited, you're apt to cause any number of unintended consequences. If she switches to someone else at your initiative who hasn't built up her trust, then loses money and bails out at the worst possible time, she'll blame you, you'll blame her, she'll be out money she wouldn't have been if she hadn't stayed the course, and your relationship will be damaged for no good reason.
Solve your own financial problems, share what works for you when you're asked, and otherwise keep out of others' financial business unless invited (and even then, tread carefully).
I fully concur with Clever_Username and SpringMan.
Re: Edward Jones or Vanguard?
It's very important to determine what the potential consequences are of staying at EJ. If your MIL has "enough" to pay EJ 3% for managing her money, and still have enough left for anything she could possibly want or need, you shouldn't pursue the issue. If the difference between 3% and .3% may be the difference between her having to rely on you (or do without some essentials), then that's a completely different scenario.
I do think the "thief" branding is unfair to EJ, or at least to some of the better-behaved EJ salespeople. Many of us work now, or have worked in the past, for ourselves or for other businesses where we charged our customers far more than the lowest possible price. And where we knew that competitors offered better products or better services at lower costs. Because personal finance is somewhat of a hobby for us, we don't see the handholding as worthwhile. But we can't really blame others for believing that investing is like most tasks in life, where professionals actually do regularly achieve better results than amateurs. If your (younger, particularly) in-law told you that do-it-yourself root canals were both less costly and more effective than those provided by a dentist, would you really be interested enough to do research to determine whether that was a good solution for you? Most likely you'd smile as best you could with your infected tooth, and head on down to your trusty dentist. That's how a lot of people still feel about investing, although there's an evolutionary change happening that will probably make that different for future generations. And maybe some day, everyone will actually be doing their own root canals, too - just a quick app download, and that tooth will be like new.
I do think the "thief" branding is unfair to EJ, or at least to some of the better-behaved EJ salespeople. Many of us work now, or have worked in the past, for ourselves or for other businesses where we charged our customers far more than the lowest possible price. And where we knew that competitors offered better products or better services at lower costs. Because personal finance is somewhat of a hobby for us, we don't see the handholding as worthwhile. But we can't really blame others for believing that investing is like most tasks in life, where professionals actually do regularly achieve better results than amateurs. If your (younger, particularly) in-law told you that do-it-yourself root canals were both less costly and more effective than those provided by a dentist, would you really be interested enough to do research to determine whether that was a good solution for you? Most likely you'd smile as best you could with your infected tooth, and head on down to your trusty dentist. That's how a lot of people still feel about investing, although there's an evolutionary change happening that will probably make that different for future generations. And maybe some day, everyone will actually be doing their own root canals, too - just a quick app download, and that tooth will be like new.
Re: Edward Jones or Vanguard?
Thanks so much for all of the excellent responses! There were so many good ones that I won't be able to respond to them individually, but I will speak to some of the concepts/sub-topics.
1. The financial element. As a boglehead and a low-cost Vanguard investor, I understand very well all of the reasons why Vanguard is an infinitely better choice than Edward Jones from a strictly financial standpoint. I would never let them near my money. That being said, I am very appreciative of the responses which spell this out. I don't think it should just come from me, and I will likely share your responses with my mother-in-law.
2. The hand-holding element. As I stated in my original post, I also understand that you can not have the pleasure of sitting across the table from a slick salesman with Vanguard. But I was curious if Vanguard Advisory does just about as much of everything else. Is their management as comprehensive, and can the client be as hands-off and worry free? I got some really great responses to this question (thank you!), but I would still like to hear a bit more from anyone who has experience with the service.
3. The blame element. All great advice from all of the responses in this area. I have been treading carefully. While my mother-in-law is as sweet as I say, and she wouldn't blame me per se, I don't want her to fear that she is losing more money in a down market because of the switch. I haven't told her that she must change, I only told her what I know about a better option. The choice will be hers. While I understand the dangers of trying to help her, I can't bear to watch her give away that much of her money without even realizing that it is happening. I spoke to someone with Vanguard who was very helpful, and I have recommended that she call the same representative. But I also need your expert third-party insights.
In relation to the blame element, a very good point was raised about the dangers of changing investment companies during this volatile market. I would be very interested to get more insight on this. If we get solidly into bear territory, for example, would that be a great time to make the change because most of the losses will happen under EJ's management? Or because there would be some automatic tax loss harvesting during the change if held in a taxable account? Or would a bear be a terrible time to change because she would lock in losses, money might be tied up and out of the market during a volatile period, etc.?
Please, no reminders that we can't time the market. I know that very well, and I know that I cannot predict that the market will go lower, or reach bear territory, or necessarily rebound, etc., etc., etc. I am just anticipating that some might say that right now is not a great time to switch. If that is the case, I am wondering if there are any conditions which she might consider to be a good time, should those conditions arise. Or maybe the best time is now (if it is right for her to change at all).
Thanks so much for all of your help!
1. The financial element. As a boglehead and a low-cost Vanguard investor, I understand very well all of the reasons why Vanguard is an infinitely better choice than Edward Jones from a strictly financial standpoint. I would never let them near my money. That being said, I am very appreciative of the responses which spell this out. I don't think it should just come from me, and I will likely share your responses with my mother-in-law.
2. The hand-holding element. As I stated in my original post, I also understand that you can not have the pleasure of sitting across the table from a slick salesman with Vanguard. But I was curious if Vanguard Advisory does just about as much of everything else. Is their management as comprehensive, and can the client be as hands-off and worry free? I got some really great responses to this question (thank you!), but I would still like to hear a bit more from anyone who has experience with the service.
3. The blame element. All great advice from all of the responses in this area. I have been treading carefully. While my mother-in-law is as sweet as I say, and she wouldn't blame me per se, I don't want her to fear that she is losing more money in a down market because of the switch. I haven't told her that she must change, I only told her what I know about a better option. The choice will be hers. While I understand the dangers of trying to help her, I can't bear to watch her give away that much of her money without even realizing that it is happening. I spoke to someone with Vanguard who was very helpful, and I have recommended that she call the same representative. But I also need your expert third-party insights.
In relation to the blame element, a very good point was raised about the dangers of changing investment companies during this volatile market. I would be very interested to get more insight on this. If we get solidly into bear territory, for example, would that be a great time to make the change because most of the losses will happen under EJ's management? Or because there would be some automatic tax loss harvesting during the change if held in a taxable account? Or would a bear be a terrible time to change because she would lock in losses, money might be tied up and out of the market during a volatile period, etc.?
Please, no reminders that we can't time the market. I know that very well, and I know that I cannot predict that the market will go lower, or reach bear territory, or necessarily rebound, etc., etc., etc. I am just anticipating that some might say that right now is not a great time to switch. If that is the case, I am wondering if there are any conditions which she might consider to be a good time, should those conditions arise. Or maybe the best time is now (if it is right for her to change at all).
Thanks so much for all of your help!
Re: Edward Jones or Vanguard?
Vanguard is not the only game in town. I have been with Fidelity for over 20 years and very satisfied. My parents are at Schwab and it too is excellent. Both give excellent advice, different levels of support, and it is quite transparent and relatively free of conflict of interest.
Re: Edward Jones or Vanguard?
Johnra,
Thanks for the reply. I agree that Vanguard is not the only game in town; I also invest with Fidelity. I mentioned the Vanguard advisory service because I have heard more about it, I know it is extremely affordable, I trust Vanguard's funds to be the simplest and cheapest, and I trust Vanguard to buy and hold very efficiently. I wanted to keep this research simple by not opening it up to a world of other options if Vanguard is the best, or at least good enough. That being said, if there is a case to be made for Fidelity's advisory services, I would love to hear it. Especially if their services are also near rock bottom cost.
Thanks!
Thanks for the reply. I agree that Vanguard is not the only game in town; I also invest with Fidelity. I mentioned the Vanguard advisory service because I have heard more about it, I know it is extremely affordable, I trust Vanguard's funds to be the simplest and cheapest, and I trust Vanguard to buy and hold very efficiently. I wanted to keep this research simple by not opening it up to a world of other options if Vanguard is the best, or at least good enough. That being said, if there is a case to be made for Fidelity's advisory services, I would love to hear it. Especially if their services are also near rock bottom cost.
Thanks!
Re: Edward Jones or Vanguard?
I should also mention that my mother-in-law is not a do-it-yourselfer, probably never will be, and I am not asking her to be. This transition only works if Vanguard (or Fidelity) can essentially do everything for her. When I spoke to Vanguard on the phone, they said that they can do that, but they obviously are motivated to sell themselves. Third party opinions welcome.
Re: Edward Jones or Vanguard?
We have seen a significant number of Fidelity advisor portfolios that are absolutely awful. High costs, non-sensical overlap, what seems to be churning, portfolios with 40 or 50 funds, etc. They usually revolve around the Fidelity Advisor Series of funds. And once people recognize how bad their portfolios are, they cannot drop the advisor without paying (tax or termination fee) to get out of those really terrible funds.
There are also reports of people who have gotten good advice from Fidelity advisors. I have not been able to figure out the difference in how 1 person ends up with the good advisors and 1 ends up with the bad ones. My feeling is not that individuals are "good" or "evil" but that Fidelity offers different kinds of assistance and that one of those is fine and harmless and the other has the possibility of being even worse than EJ.
For this reason I never recommend getting financial advice from Fidelity - not because it is consistently bad, but because I don't know how to avoid the really bad evil self-serving advisors that are somehow associated with the Fidelity name.
There are also reports of people who have gotten good advice from Fidelity advisors. I have not been able to figure out the difference in how 1 person ends up with the good advisors and 1 ends up with the bad ones. My feeling is not that individuals are "good" or "evil" but that Fidelity offers different kinds of assistance and that one of those is fine and harmless and the other has the possibility of being even worse than EJ.
For this reason I never recommend getting financial advice from Fidelity - not because it is consistently bad, but because I don't know how to avoid the really bad evil self-serving advisors that are somehow associated with the Fidelity name.
Link to Asking Portfolio Questions
Re: Edward Jones or Vanguard?
I have absolutely no experience with or knowledge of them, but perhaps a local financial advisor would be a solution, someone who works on flat fee or % of portfolio rather than commission. Obviously she/you would need to do some research first on reputability and steps to avoid Madoff-style frauds.
Basically you want a Boglehead picking up some extra income by meeting individuals instead of posting here.
Basically you want a Boglehead picking up some extra income by meeting individuals instead of posting here.
Re: Edward Jones or Vanguard?
I think the difference here is that there is no possibility that Vanguard will charge an excessive fee for advice (an arguable point at 0.3%, which is excessive in my opinion) while other companies give you the opportunity to end up paying fees and investing in expensive funds, including Fidelity. Place like Fidelity and Schwab are fine as long as you are sure to not pay for advisory services and as long as you don't buy expensive funds. A person looking for handholding will not be taken advantage of by Fidelity the way EJ does, but they certainly can be taken advantage of.develop wrote:Johnra,
Thanks for the reply. I agree that Vanguard is not the only game in town; I also invest with Fidelity. I mentioned the Vanguard advisory service because I have heard more about it, I know it is extremely affordable, I trust Vanguard's funds to be the simplest and cheapest, and I trust Vanguard to buy and hold very efficiently. I wanted to keep this research simple by not opening it up to a world of other options if Vanguard is the best, or at least good enough. That being said, if there is a case to be made for Fidelity's advisory services, I would love to hear it. Especially if their services are also near rock bottom cost.
Thanks!
Re: Edward Jones or Vanguard?
It is practically not possible to earn a living giving financial advice at a cost any investor can afford to pay. No local advisor is going to take a portfolio under % AUM at a cost anyone can pay. EJ is just such an example, in fact. You can buy investment management, not advising, from some low cost companies, but I would not agree to try to vouch for anyone in particular.gd wrote:I have absolutely no experience with or knowledge of them, but perhaps a local financial advisor would be a solution, someone who works on flat fee or % of portfolio rather than commission. Obviously she/you would need to do some research first on reputability and steps to avoid Madoff-style frauds.
Basically you want a Boglehead picking up some extra income by meeting individuals instead of posting here.
If other posters want to vouch for specific individuals that is their option.
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Re: Edward Jones or Vanguard?
I used Fidelity's Portfolio Advisory Service for a couple of years. The fee was about 1% of my assets. They were readily available to call and discuss things. They have proprietary funds. I found it a user friendly set up. My only issue was adding up fees. However, if one is prone to jumping in and out of markets, or following the latest list of trendy funds, then the fee would probably be well worth it.
I had an interview with a local advisor who charges 1%. They offer access to DFA funds. So there are advisors out there who offer pretty decent rates. And you also have the robo-advisors. In the long run, I think it all depends on what makes you more comfortable- managing on your own or seeking advice/guidance.
I had an interview with a local advisor who charges 1%. They offer access to DFA funds. So there are advisors out there who offer pretty decent rates. And you also have the robo-advisors. In the long run, I think it all depends on what makes you more comfortable- managing on your own or seeking advice/guidance.
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Re: Edward Jones or Vanguard?
I've been investigating investment services, and one thing I learned is that Vanguard does not do tax loss harvesting for the .30% Advisory accounts. I realize you were not using the term in that context, but I thought I'd throw that in.develop wrote: automatic tax loss harvesting
You didn't mention your MIL's age. While she enjoys the attention she gets at EJ, the real question is, can she adjust to a different way of doing business? Is she interested in her investments? Couldn't she join an investor club and get some of her affiliation needs met in that way?
The Daughter
Fran
Re: Edward Jones or Vanguard?
I do not see that your mother in law asked for your advice. Did your mother in law ask for your help or your advice? If the answer is no, then I would not try to convince her to change the way she handles her investments. Unsolicited advice is rarely accepted, and often creates ill feelings and negatively affects the relationship.
You may think it is better for her to leave Edward Jones and move her money to Vanguard (and I would likely agree with you) but it does not matter what you think or what I think or what anyone else thinks except your mother in law. It is her money, and she has the right to invest her money in any way she sees fit, and I would leave it at that.
You may think it is better for her to leave Edward Jones and move her money to Vanguard (and I would likely agree with you) but it does not matter what you think or what I think or what anyone else thinks except your mother in law. It is her money, and she has the right to invest her money in any way she sees fit, and I would leave it at that.
Last edited by mptfan on Wed Jan 20, 2016 10:23 am, edited 2 times in total.
Re: Edward Jones or Vanguard?
My parents remain with Edward Jones. They know they are essentially pay a "new car" in fees each year. They have a Vanguard account but keep most of their assets with Edward Jones. I bring it up once a year or so. I thought they had stopped putting new money with EJ, but they have bought new funds in the past months. It is what it is. They feel an emotional attachment to their EJ rep and it is "too hard" to switch. You tried. Move on.
Re: Edward Jones or Vanguard?
To all of those who are trying to protect my mother-in-law (or me, I'm not quite sure), thank you for your concern. I do appreciate the good advice you have shared. Rest assured, I have no intention of forcing her to change to Vanguard. I am trying to collect enough useful information to present to her so that she can make her own decision. Since my original post I have been trying to figure out if the Boglehead community thinks it is a good idea for her to switch at all, rather than asking how I can convince her.
I feel that I have an obligation to help her to understand her options. From there it will be her decision.
So if I tally all the responses up, 45% say switch to Vanguard, 45% say to keep my nose out, and 10% say switch to Fidelity. I am back to square one with a dead heat! Any other knowledge about Vanguard's advisory service, specifically? If folks that are familiar with the service think it can do everything EJ does, minus the face to face, I will feed that back to her. If folks think she will feel stranded, I will feed that back to her.
Many, many thanks to those who have already chimed in.
I feel that I have an obligation to help her to understand her options. From there it will be her decision.
So if I tally all the responses up, 45% say switch to Vanguard, 45% say to keep my nose out, and 10% say switch to Fidelity. I am back to square one with a dead heat! Any other knowledge about Vanguard's advisory service, specifically? If folks that are familiar with the service think it can do everything EJ does, minus the face to face, I will feed that back to her. If folks think she will feel stranded, I will feed that back to her.
Many, many thanks to those who have already chimed in.
Re: Edward Jones or Vanguard?
It would help if you told us more about what Edward Jones does for her, both at the face to face meetings and throughout the year.
It would also help if we knew at least a little more about her portfolio and goals. Small portfolio she needs to squeeze as much income out of as possible to cover expenses? Large portfolio with legacy wishes? Mostly tax advantaged accounts vs taxable with significant capital gains? Conservative vs aggressivy tilted? Age? (A mother in law could be 40 or 85....) Investment goals?
From a pure math standpoint, EJ is likely to be a very bad deal (high fees, loads, ERs, etc). I don't think we have enough detail to know whether there are other things that in balance make it an acceptable deal for her.
I helped get my parents away from a local high fee advisor and over to Vanguard, but we didn't use the advisory service, so I don't have personal experience with the advisory services.
There are some previous threads about Vanguard's advisory services, so a search may also give you some more info.
Good luck, and good for you for wanting to help her and get her more info to help her decision.
cj
It would also help if we knew at least a little more about her portfolio and goals. Small portfolio she needs to squeeze as much income out of as possible to cover expenses? Large portfolio with legacy wishes? Mostly tax advantaged accounts vs taxable with significant capital gains? Conservative vs aggressivy tilted? Age? (A mother in law could be 40 or 85....) Investment goals?
From a pure math standpoint, EJ is likely to be a very bad deal (high fees, loads, ERs, etc). I don't think we have enough detail to know whether there are other things that in balance make it an acceptable deal for her.
I helped get my parents away from a local high fee advisor and over to Vanguard, but we didn't use the advisory service, so I don't have personal experience with the advisory services.
There are some previous threads about Vanguard's advisory services, so a search may also give you some more info.
Good luck, and good for you for wanting to help her and get her more info to help her decision.
cj
Re: Edward Jones or Vanguard?
I think you are conflating two distinct questions.develop wrote:So if I tally all the responses up, 45% say switch to Vanguard, 45% say to keep my nose out, and 10% say switch to Fidelity.
1. Would it be better from a financial point of view for your mother in law to invest with Vanguard instead of Edward Jones?
2. Should you keep your nose out of her business?
I think almost everyone on this board (including me) would say yes to question number 1. However, you will get a split of opinion regarding question number 2, and I think the most important fact needed to answer question number 2 is whether she asked for your opinion or advice. Several people, including me, have asked you if your mother in law asked for your advice, and you have not answered that question. I will assume from your non-answer that she did not, and therefore my answer to question number 2 is also yes.
Re: Edward Jones or Vanguard?
I would be worried that the reason she needs the hand holding is because EJ has her taking more risk than she needs to / should take.
In addition to that, we've seen many examples of advisers making needlessly complex portfolios that practically guarantee that some holding or another will be doing poorly at any given time, generating unnecessary anxiety.
So the need for "an expert" can be self-reinforcing.
Vanguard should be able to offer her the same income with a less risky and less complicated portfolio that results in significantly less anxiety.
In addition to that, we've seen many examples of advisers making needlessly complex portfolios that practically guarantee that some holding or another will be doing poorly at any given time, generating unnecessary anxiety.
So the need for "an expert" can be self-reinforcing.
Vanguard should be able to offer her the same income with a less risky and less complicated portfolio that results in significantly less anxiety.
Last edited by sls239 on Wed Jan 20, 2016 1:36 pm, edited 1 time in total.
Re: Edward Jones or Vanguard?
Clip651,
Thank you for your kind and helpful response. I really appreciate it. I don't know the precise details of her accounts (and don't want to), but I can assume that they are not huge accounts with an eye towards a legacy. She is nearing retirement age and her goal is simply to live a modest life in retirement.
EchoCharlieBravo,
I also really appreciated your thoughtful and helpful response. Thank you for taking the time.
mptfan,
Thank you for your responses. However, I am not asking whether it would be better, from a financial point of view, to invest with vanguard. Nor am I asking whether I should keep my nose out of my MIL's business. Thank you for your concern though. You will be happy to know that my MIL has asked me for guidance.
My request was for insight from anyone who has experience with Vanguard's advisory service, especially in regard to the advising and customer service, not the fees. Thanks so much to everyone who contributed!
Thank you for your kind and helpful response. I really appreciate it. I don't know the precise details of her accounts (and don't want to), but I can assume that they are not huge accounts with an eye towards a legacy. She is nearing retirement age and her goal is simply to live a modest life in retirement.
EchoCharlieBravo,
I also really appreciated your thoughtful and helpful response. Thank you for taking the time.
mptfan,
Thank you for your responses. However, I am not asking whether it would be better, from a financial point of view, to invest with vanguard. Nor am I asking whether I should keep my nose out of my MIL's business. Thank you for your concern though. You will be happy to know that my MIL has asked me for guidance.
My request was for insight from anyone who has experience with Vanguard's advisory service, especially in regard to the advising and customer service, not the fees. Thanks so much to everyone who contributed!
Re: Edward Jones or Vanguard?
Thanks sls239! Excellent point.
Re: Edward Jones or Vanguard?
A point of view that not all would agree with is that getting as much business as possible out of the hands of the likes of Edward Jones is a moral obligation when you are in a position to do so, whether or not the immediate victims even agree that there is an issue. It's not different from preventing an innocent person from becoming a victim of any other scam, in particular and especially those that are not actually illegal
Re: Edward Jones or Vanguard?
You should have started with that.develop wrote:You will be happy to know that my MIL has asked me for guidance.
Re: Edward Jones or Vanguard?
This is exactly how I feel.dbr wrote:A point of view that not all would agree with is that getting as much business as possible out of the hands of the likes of Edward Jones is a moral obligation when you are in a position to do so, whether or not the immediate victims even agree that there is an issue. It's not different from preventing an innocent person from becoming a victim of any other scam, in particular and especially those that are not actually illegal
Re: Edward Jones or Vanguard?
Being "that guy" is enough to scare me away from that. I had a similar situation in our family and I held back. IMHO this needs to be a decision that the investor should make on his/her own. Look at the current bear market...Grogs wrote:SpringMan wrote:This would be my advice if the OP was talking about his own account. Since it is the MIL's account, problems could crop up . I had my late father switch from John Hancock to Vanguard right before the dot com tech crash. He got frustrated a bailed out at the bottom. Though he never said so, I feel he blamed me.avenger wrote:RUN, don't walk, from Edward Jones.
2) Right now she complains all the time about how "that guy" keeps losing her money. If I get her to transfer, I become "that guy".
So far, it just hasn't been worth the pain (especially #2) to push her to switch. If she decides she's absolutely ready to fire her manager and asks for my help, I'll get her transferred over, but the potential downsides of pushing her to switch outweigh the upside of avoiding the small(ish) amount of fees.
Part-Owner of Texas |
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“The CMH-the Cost Matters Hypothesis -is all that is needed to explain why indexing must and will work… Yes, it is that simple.” John C. Bogle
Re: Edward Jones or Vanguard?
I have received advice from Vanguard in terms of a review of my portfolio. A relative also received a review of his portfolio. This did not require using the advisor service. The plan was reasonable. I did get a chance to have a chat with a Vanguard advisor after the written plan. I was concerned about increasing my tax advantaged space at the time. I feel I got good advice to not purchase a variable annuity through Vanguard. The reason given was that it would add additional expense and I would be better off investing in the funds directly.
On the other hand, I had several cold calls from a Fidelity employee trying to get me to purchase an equity indexed annuity. I considered that to be awful advice and I complained to Fidelity and the calls stopped.
I have an elderly relative who would not leave her local advisor, because she feels comfortable with him and he comes to the house every two months to discuss her portfolio. I don't think he is dishonest but he is expensive. She is losing money in individual muni bonds because the bonds and does not understand this.
On the other hand, I had several cold calls from a Fidelity employee trying to get me to purchase an equity indexed annuity. I considered that to be awful advice and I complained to Fidelity and the calls stopped.
I have an elderly relative who would not leave her local advisor, because she feels comfortable with him and he comes to the house every two months to discuss her portfolio. I don't think he is dishonest but he is expensive. She is losing money in individual muni bonds because the bonds and does not understand this.
Re: Edward Jones or Vanguard?
The best scams are the ones that are not actually dishonest but simply set up the mark to make decisions against their own interest.SGM wrote:
I have an elderly relative who would not leave her local advisor, because she feels comfortable with him and he comes to the house every two months to discuss her portfolio. I don't think he is dishonest but he is expensive. She is losing money in individual muni bonds because the bonds and does not understand this.
Re: Edward Jones or Vanguard?
I have not used the advisory service, but since you are relatively new, I will point out something you may not have realized.develop wrote:My request was for insight from anyone who has experience with Vanguard's advisory service, especially in regard to the advising and customer service, not the fees. Thanks so much to everyone who contributed!
The advisors at Vanguard have no incentive to sell a person something that is not in their best interests. They do not work on commission. And Vanguard does not exist for profits. This is simply no true of the other companies (with few exceptions - maybe TIAA CREF?) Other companies have a profit motive and the sales people are almost certainly selling to get commissions. It is a conflict of interest because the best commissions come from products that have high fees. Vanguard does not have this type of conflict of interest.
And we can tell you now that a VG advisor is going to suggest something that looks a lot like a simple 3 index fund portfolio, maybe with some international bonds added in and maybe some legacy holdings that might not be wise to sell.
I have no experience with their service and how they go about doing what they do - can't help you with that part. But I do feel confident that there is very little (if any) likelihood that she would be taken advantage of there. I do not feel that way about the others.
Link to Asking Portfolio Questions
Re: Edward Jones or Vanguard?
All Vanguard for me.
Re: Edward Jones or Vanguard?
Don't you usually get a free meal at a local steakhouse for that?I had several cold calls from a Fidelity employee trying to get me to purchase an equity indexed annuity.
Part-Owner of Texas |
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“The CMH-the Cost Matters Hypothesis -is all that is needed to explain why indexing must and will work… Yes, it is that simple.” John C. Bogle
Re: Edward Jones or Vanguard?
Yeah, talk about scams and rip-offs.mickeyd wrote:Don't you usually get a free meal at a local steakhouse for that?I had several cold calls from a Fidelity employee trying to get me to purchase an equity indexed annuity.
Re: Edward Jones or Vanguard?
If mil really wants a face to face person, perhaps she could go with a fee only planner, say with someone from garret planning network.
From their faq:
Members of the Garrett Planning Network provide their advisory services on an hourly, Fee-Only basis. Members do not accept sales commissions or any compensation other than directly from their clients. Clients pay only for the time an advisor works with or for them. Some Garrett advisors also may offer their services on a retainer basis.
http://www.garrettplanningnetwork.com/about/faqs
Note I have no personal experience but have seen them recommended here in the past.
The finance buff has several other advisor recs http://thefinancebuff.com/the-average-i ... d-one.html
From their faq:
Members of the Garrett Planning Network provide their advisory services on an hourly, Fee-Only basis. Members do not accept sales commissions or any compensation other than directly from their clients. Clients pay only for the time an advisor works with or for them. Some Garrett advisors also may offer their services on a retainer basis.
http://www.garrettplanningnetwork.com/about/faqs
Note I have no personal experience but have seen them recommended here in the past.
The finance buff has several other advisor recs http://thefinancebuff.com/the-average-i ... d-one.html
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Re: Edward Jones or Vanguard?
My Mom asked me for advice and I'm helping her with her portfolio. I was tempted to get her professional help and she'd definitely need to talk to a human (she doesn't use the Internet). I've heard horrible things about Edward jones portfolios on this board and did not consider them.
I did consider Ric Edelman. Expensive. But (based on his radio program) I don't think he'd let anyone get a garbage portfolio.
Anyone have experience with that option?
I did consider Ric Edelman. Expensive. But (based on his radio program) I don't think he'd let anyone get a garbage portfolio.
Anyone have experience with that option?