Edward Jones vs Vanguard self managed

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smmsmm57
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Edward Jones vs Vanguard self managed

Post by smmsmm57 » Fri May 19, 2017 12:07 pm

I just got off the phone with my Edward Jones guy who told me the 1.44 % fee I am being charged is worth it because my account is continuously being re-balanced and that the return thus far for the year is 5.39 %.

So according to him he is providing me with a well worth it service.

He also told me about the "new fiduciary rules" that take effect on June 9th will cause me to not to be able to move around my fund balances within Vanguard if I were to do all the work with Vanguard myself.

I asked him my "dumb questions" and got fast answers that seemed to say "Edward Jones is well worth it for you" and I do not know enough to ask any more questions.

Perhaps someone here can explain to me which way I should go? Thanks very much

renue74
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Re: Edward Jones vs Vanguard self managed

Post by renue74 » Fri May 19, 2017 12:44 pm

Search "Transfer Account from Edward Jones" in the search field box in the top right corner of this site.

deltaneutral83
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Re: Edward Jones vs Vanguard self managed

Post by deltaneutral83 » Fri May 19, 2017 12:45 pm

smmsmm57 wrote:I just got off the phone with my Edward Jones guy who told me the 1.44 % fee I am being charged is worth it because my account is continuously being re-balanced and that the return thus far for the year is 5.39 %.
The return of 5.39% is a ludicrous argument and he is basically assuming you are not competent enough to know why. If his basketball team scores 90 points that's not that good if the opponent (the market in this case) scores 95. A three fund portfolio isn't that hard to manage and re balance.

No one knows what's going to happen in the future, but if he's charging you 1.44% AUM he has to beat the markets by 1.34% (assuming your net ER is 0.1% with Vanguard funds) year over year. Play the odds, he and 87% of them won't, and even if he does, it's mostly luck. At 1.44% AUM, I'm thinking it's more like 95% chance he can't win over 20/30/40 years.

Several years ago (when I was aware of Boglehead principals but not aware of this website) I did the Ramsey Adviser with American Funds with front loads but with the amount invested I hit breakpoints to lessen the blow. There is no annual AUM (which I was sure to ask the guy as I was aware of that raquet even in my early days) but the typical high ER's (not high for active, but high overall) that comes with AF's. He has helped me find other financial pros in the tax world as well that have been helpful and also enlightened me about HSAs.
Last edited by deltaneutral83 on Fri May 19, 2017 12:46 pm, edited 1 time in total.

Jack FFR1846
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Re: Edward Jones vs Vanguard self managed

Post by Jack FFR1846 » Fri May 19, 2017 12:46 pm

I rebalance on my birthday. It takes me 15 minutes.

Is the 5.39% before the 1.44% fee, which would put ytd return at 3.95%?

If that's the case, it matches pretty well with my Fidelity IRA that's 60/40 at 4.85% year to date net of fees.

If his only value add is rebalancing, then buy a Vanguard target date fund and have it rebalanced daily.

Beyond this 1.44% fee, what other fees are there. (there are other fees). My accounts have the ER and no other fees.
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JeepDaze
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Re: Edward Jones vs Vanguard self managed

Post by JeepDaze » Fri May 19, 2017 12:51 pm

smmsmm57 wrote:I just got off the phone with my Edward Jones guy who told me the 1.44 % fee I am being charged is worth it because my account is continuously being re-balanced and that the return thus far for the year is 5.39 %.

So according to him he is providing me with a well worth it service.

He also told me about the "new fiduciary rules" that take effect on June 9th will cause me to not to be able to move around my fund balances within Vanguard if I were to do all the work with Vanguard myself.

I asked him my "dumb questions" and got fast answers that seemed to say "Edward Jones is well worth it for you" and I do not know enough to ask any more questions.

Perhaps someone here can explain to me which way I should go? Thanks very much
My 401k portfolio (4 funds, 76/24) return is 6.32% YTD. My overall expense ratio is 0.06%. I manage my own investments.

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Re: Edward Jones vs Vanguard self managed

Post by donaldfair71 » Fri May 19, 2017 12:53 pm

Jack FFR1846 wrote:
If his only value add is rebalancing, then buy a Vanguard target date fund and have it rebalanced daily.
Right??!!

Even with his reasoning, why pay more when you can pay less and get even more automated service?

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FrugalInvestor
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Re: Edward Jones vs Vanguard self managed

Post by FrugalInvestor » Fri May 19, 2017 12:54 pm

You would be better off handling the account yourself and not re-balancing at all than having EJ re-balance it and charging you 1.44%/year. But there are better ways as others have suggested.
IGNORE the noise! | Our life is frittered away by detail... simplify, simplify. - Henry David Thoreau

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Re: Edward Jones vs Vanguard self managed

Post by niceguy7376 » Fri May 19, 2017 12:56 pm

smmsmm57 wrote:He also told me about the "new fiduciary rules" that take effect on June 9th will cause me to not to be able to move around my fund balances within Vanguard if I were to do all the work with Vanguard myself.
Can the other members please explain me what the EJ guy is trying to tell here?
I have seen several posts within the last 30 days about EJ and new fiduciary rules and something to do with internal transaction limits but here the EJ guy is talking about VG

MittensMoney
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Re: Edward Jones vs Vanguard self managed

Post by MittensMoney » Fri May 19, 2017 12:57 pm

First of all, rebalancing has no chance of adding 1.44% to your returns each year. Second, you're paying far more than 1.44% when you factor in Expense Ratios, front or back-end loads, and trade costs (incurred every time he rebalances). Ed Jones is far too costly, even if you want a fully managed account there are many, many cheaper options that deliver the same level of service. They're not bad people at Ed Jones, but they're business model simply doesn't allow them to be the best option on the market.

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Re: Edward Jones vs Vanguard self managed

Post by mrc » Fri May 19, 2017 12:59 pm

smmsmm57 wrote:He also told me about the "new fiduciary rules" that take effect on June 9th will cause me to not to be able to move around my fund balances within Vanguard if I were to do all the work with Vanguard myself.
Really? That is without conscience. And wrong. He's relying on your ignorance. Move to Vanguard, stay ignorant if you want to, but don't pay this guy 1.4% of your money.
A great challenge of life: Knowing enough to think you're doing it right, but not enough to know you're doing it wrong. — Neil deGrasse Tyson

Jack FFR1846
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Re: Edward Jones vs Vanguard self managed

Post by Jack FFR1846 » Fri May 19, 2017 12:59 pm

niceguy7376 wrote:
smmsmm57 wrote:He also told me about the "new fiduciary rules" that take effect on June 9th will cause me to not to be able to move around my fund balances within Vanguard if I were to do all the work with Vanguard myself.
Can the other members please explain me what the EJ guy is trying to tell here?
I have seen several posts within the last 30 days about EJ and new fiduciary rules and something to do with internal transaction limits but here the EJ guy is talking about VG
The technical term for the Jones guy's statement is "FUD". Fear, uncertainty and doubt. This is what is thrown out there to someone who may not research the truth of the statement and will scare the client into staying with the expensive, dishonest adviser.

In short, he's full of crap. Ask him to print out and highlight the new fiduciary rule where it says anything of the kind. It doesn't. Anywhere.
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deltaneutral83
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Re: Edward Jones vs Vanguard self managed

Post by deltaneutral83 » Fri May 19, 2017 1:02 pm

MittensMoney wrote:Second, you're paying far more than 1.44% when you factor in Expense Ratios, front or back-end loads, and trade costs (incurred every time he rebalances).
I had just assumed that the 1.44% was a wrap fee that included loads and ER's. That would be insane to pay 1.44% + ER's. I can't even wrap my head around loads on top of that.

ICMoney
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Re: Edward Jones vs Vanguard self managed

Post by ICMoney » Fri May 19, 2017 1:08 pm

OP, I want to make sure you understand what you are paying Edward Jones. They are charging you 1.44%, plus whatever the expense ratios of the funds you're invested in there (plus possibly other fees). Let's say the total % charges total 2.50% per year.

With Vanguard, let's say your expense ratio is 0.15% per year (it can be less, but 0.15% is a reasonable expense ratio at Vanguard)).

This modeler will show you the difference in what you get to keep between those two ERs. (https://personal.vanguard.com/us/insigh ... about-cost) Slide the Expense Ratio bar down to 0.15% and look at the chart to see how much of the returns are going to you vs. expenses with Vanguard. Then slide it over to 2.50% and see how the chart changes. See how much EJ is getting of YOUR money, compared to what you could be keeping if you went with Vanguard or another lower cost provider? Are you willing to let EJ take all of that extra money of yours for the privilege of investing with them?

You can do this yourself - you can purchase Target Date funds at Vanguard for a very low expense ratio which are rebalanced automatically as others have mentioned. And, you won't have to pay 2.50% per year to get this benefit.

Feel free to ask any questions you have here about moving forward/away from EJ - bogleheads are here to help and are not out to take advantage of you by any means.

Best,
ICM

CnC
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Re: Edward Jones vs Vanguard self managed

Post by CnC » Fri May 19, 2017 1:10 pm

smmsmm57 wrote:I just got off the phone with my Edward Jones guy who told me the 1.44 % fee I am being charged is worth it because my account is continuously being re-balanced and that the return thus far for the year is 5.39 %.

So according to him he is providing me with a well worth it service.

He also told me about the "new fiduciary rules" that take effect on June 9th will cause me to not to be able to move around my fund balances within Vanguard if I were to do all the work with Vanguard myself.

I asked him my "dumb questions" and got fast answers that seemed to say "Edward Jones is well worth it for you" and I do not know enough to ask any more questions.

Perhaps someone here can explain to me which way I should go? Thanks very much

Well I can't explain all the details but I am a recent leaver of Edward Jones. There is no reason to stay there. Compare their returns to index funds or low fee mutual funds for pretty much any time and you will see that they are not making you money.

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Re: Edward Jones vs Vanguard self managed

Post by CnC » Fri May 19, 2017 1:15 pm

niceguy7376 wrote:
smmsmm57 wrote:He also told me about the "new fiduciary rules" that take effect on June 9th will cause me to not to be able to move around my fund balances within Vanguard if I were to do all the work with Vanguard myself.
Can the other members please explain me what the EJ guy is trying to tell here?
I have seen several posts within the last 30 days about EJ and new fiduciary rules and something to do with internal transaction limits but here the EJ guy is talking about VG

Basically ED use to be able to tell you to buy XYZ fund. They then made a commission from XYZ fund in addition to a small fee from your money.

Some brokers we're good and honest and got you great performance. But a large portion put you in poor funds that have them big commissions.

Edward Jones now due to recent laws targeting the behavior is getting rid of all commissions in favor of a pretty big yearly fee.

A fee that is going to make lots of people do a double take

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rustymutt
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Re: Edward Jones vs Vanguard self managed

Post by rustymutt » Fri May 19, 2017 1:18 pm

You could hire some of the best of professional money managing companies in the world for under 1%. They are robbers of your wealth. You're more than welcome to stay with them, as they love your money. Do It yourself man. It's easy once setup. My expenses yearly, under .19%
10 year return of 7.7%. When you give up front to someone, or company, you loose that amount of return, and that's a fact I can't get past.
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Re: Edward Jones vs Vanguard self managed

Post by David Jay » Fri May 19, 2017 1:19 pm

smm-smm:

If you do not want to do anything yourself, Vanguard has an advisor service that is 0.3% per year and they will only put you in low-cost funds. So at minimum, that will save you 1.1% per year. Over your lifetime this will save you about 1/3 of ALL your future gains.

Also, Vanguard will let you out of their PAS service without any argument if you choose to DIY after you have done some research and learned a bit (BH is a great place to learn!).
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

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Re: Edward Jones vs Vanguard self managed

Post by harvestbook » Fri May 19, 2017 1:29 pm

I branched off from Edward Jones in 2013 and after gaining confidence at Vanguard managing our own funds, we moved everything from EJ to Vanguard last year. We couldn't be happier. It was very simple, too--I just initiated the process with Vanguard and it was done. I liked our Edward Jones advisor--he was friendly and did a good job pretending to be interested in us, but ultimately he was doing what was best for HIM and not US.

John Bogle's predicting 4 percent returns for equities over the next decade, and probably around 2-3 percent for bonds. So at that expense ratio, you will be giving Edward Jones half of your gains over the next decade.

Run away and don't look back. If you want simple, stick it in a Target Retirement fund or LifeStrategy fund and let it ride. Good luck.
Last edited by harvestbook on Fri May 19, 2017 1:30 pm, edited 1 time in total.
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Nate79
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Re: Edward Jones vs Vanguard self managed

Post by Nate79 » Fri May 19, 2017 1:30 pm

Plain and simple he lied to you. I hope you have zero confidence in working with this charlatan and transfer out asap.

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BL
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Re: Edward Jones vs Vanguard self managed

Post by BL » Fri May 19, 2017 1:44 pm

Welcome.
Google Edward Jones and EJ here to read about others who decided to leave.

At least they are being up front now instead of being able to hide the costs. Unfortunately it may cost still more than it did for small investors.

At V, you can either use a 0.3% AUM adviser if you have 50k to invest and get low-ER funds.

Or, you can stick to one of the balanced funds such as Life Strategy, Target, Balanced, or even Wellington or Wellesley active funds. All are low-ER.

Or, you can purchase the 3-funds separately in the 3-fund portfolio. Lowest ER. 3k minimum in funds unless you want similar ETFs instead.

The key thing is deciding how much bonds you want. What % bonds do you have now?
Some suggest age in bonds down to age-20 in bonds.

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Re: Edward Jones vs Vanguard self managed

Post by bloom2708 » Fri May 19, 2017 3:51 pm

Build your knowledge here and plan to leave. As a former EJ escapee, do not contact them again.

Contact Vanguard or Fidelity and pull the money to your new destination. Do so after you spend time learning and reading.

https://www.dinkytown.net/java/CompareFees.html

Put in the amount you have, the time horizon, new contributions. Then set 3 fee levels. .1, 1.44 and 2.5.

See the difference in portfolio size. :shock:

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Re: Edward Jones vs Vanguard self managed

Post by Dottie57 » Fri May 19, 2017 5:26 pm

smmsmm57 wrote:I just got off the phone with my Edward Jones guy who told me the 1.44 % fee I am being charged is worth it because my account is continuously being re-balanced and that the return thus far for the year is 5.39 %.

So according to him he is providing me with a well worth it service.

He also told me about the "new fiduciary rules" that take effect on June 9th will cause me to not to be able to move around my fund balances within Vanguard if I were to do all the work with Vanguard myself.

I asked him my "dumb questions" and got fast answers that seemed to say "Edward Jones is well worth it for you" and I do not know enough to ask any more questions.

Perhaps someone here can explain to me which way I should go? Thanks very much

I have a 5.15% gain in my 401k without the 1.44% fee. You are being taken for a ride.

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Re: Edward Jones vs Vanguard self managed

Post by NotWhoYouThink » Fri May 19, 2017 5:40 pm

I just got off the phone with my Edward Jones guy who told me the 1.44 % fee I am being charged is worth it because my account is continuously being re-balanced and that the return thus far for the year is 5.39 %.

So according to him he is providing me with a well worth it service.
The important thing for you to know about the situation is that there is nothing you can say, no data you can present, no argument you can make that will make the E Jones guy say "Oh, I guess you're right, you are wasting your money with me and should move to Vanguard and DYI!" If you move, he loses money. His company has heard all the arguments before, and he has been trained to counter all of them. Now his arguments are weak and make little sense, but he has been trained to stick with them come what may. Because if you leave, he and E Jones lose money.

So banish from your mind any hint of a thought that he will ever agree with you. He won't. Ever.

Now, what do you want to do? Why? Plan what you are going to do, know why you're going to do it, and then get started.

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Re: Edward Jones vs Vanguard self managed

Post by BolderBoy » Fri May 19, 2017 7:30 pm

smmsmm57 wrote:I just got off the phone with my Edward Jones guy who told me the 1.44 % fee I am being charged is worth it because my account is continuously being re-balanced and that the return thus far for the year is 5.39 %.

So according to him he is providing me with a well worth it service.

He also told me about the "new fiduciary rules" that take effect on June 9th will cause me to not to be able to move around my fund balances within Vanguard if I were to do all the work with Vanguard myself.

I asked him my "dumb questions" and got fast answers that seemed to say "Edward Jones is well worth it for you" and I do not know enough to ask any more questions.

Perhaps someone here can explain to me which way I should go? Thanks very much
Wow. Is he willing to use EJ company letterhead and put all those claims in writing and sign his name to it and mail it to you via the USPS?

I didn't think so. What does that tell you?
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Re: Edward Jones vs Vanguard self managed

Post by Silverado » Sat May 20, 2017 8:18 am

mrc wrote:
smmsmm57 wrote:He also told me about the "new fiduciary rules" that take effect on June 9th will cause me to not to be able to move around my fund balances within Vanguard if I were to do all the work with Vanguard myself.
Really? That is without conscience. And wrong. He's relying on your ignorance. Move to Vanguard, stay ignorant if you want to, but don't pay this guy 1.4% of your money every single year, forever.
Finished your sentence for completeness. I talk to people sometimes who seem to not understand that that fee continues to erode your dollars. Even without considering the drag on returns, it's a bad thing.

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Re: Edward Jones vs Vanguard self managed

Post by Mr.BB » Sun May 21, 2017 1:17 pm

NotWhoYouThink wrote:
I just got off the phone with my Edward Jones guy who told me the 1.44 % fee I am being charged is worth it because my account is continuously being re-balanced and that the return thus far for the year is 5.39 %.

So according to him he is providing me with a well worth it service.
The important thing for you to know about the situation is that there is nothing you can say, no data you can present, no argument you can make that will make the E Jones guy say "Oh, I guess you're right, you are wasting your money with me and should move to Vanguard and DYI!" If you move, he loses money. His company has heard all the arguments before, and he has been trained to counter all of them. Now his arguments are weak and make little sense, but he has been trained to stick with them come what may. Because if you leave, he and E Jones lose money.

So banish from your mind any hint of a thought that he will ever agree with you. He won't. Ever.

Now, what do you want to do? Why? Plan what you are going to do, know why you're going to do it, and then get started.
Is it 5.39% BEFORE fees and expenses? Ask him for the number after all those other numbers are applied.
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Re: Edward Jones vs Vanguard self managed

Post by bayview » Sun May 21, 2017 1:37 pm

smmsmm57 wrote: ...He also told me about the "new fiduciary rules" that take effect on June 9th will cause me to not to be able to move around my fund balances within Vanguard if I were to do all the work with Vanguard myself.
:shock: :shock: :shock:

This goes beyond trying to convince clients that EJ is good for their finances. This is a flat-out lie, and on the basis of that claim alone, you should lose him. You don't want a liar handling your savings.
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri

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Re: Edward Jones vs Vanguard self managed

Post by Mr.BB » Sun May 21, 2017 1:43 pm

bayview wrote:
smmsmm57 wrote: ...He also told me about the "new fiduciary rules" that take effect on June 9th will cause me to not to be able to move around my fund balances within Vanguard if I were to do all the work with Vanguard myself.
:shock: :shock: :shock:

This goes beyond trying to convince clients that EJ is good for their finances. This is a flat-out lie, and on the basis of that claim alone, you should lose him. You don't want a liar handling your savings.
+1 He just gave you every reason in the world to leave EJ just on that statement alone.
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Re: Edward Jones vs Vanguard self managed

Post by pkcrafter » Sun May 21, 2017 2:38 pm

SmmSmm, did the advisor mention Guided Solutions, or are you already in that? The fee is 1.35%, so it's not clear how you got up to 1.44%. The new fiduciary rules are for advisors, not individual investors, so you would not be restricted at Vanguard or anywhere else.

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Re: Edward Jones vs Vanguard self managed

Post by blueblock » Sun May 21, 2017 5:55 pm

Jack FFR1846 wrote:I rebalance on my birthday. It takes me 15 minutes.
Bingo. Re-balancing is a pretty lame rationale for paying 1.44% of AUM.

When you hit a million, that's $14,400 you'll be paying for 15 minutes of work for just that one year. But of course the total expense won't be for just that one year, because you will have been paying 1.44% of your growing portfolio balance year after year after year.

You've probably heard the old joke that an adviser can help send the kids to college, but it's his kids, not yours.

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