Edward Jones trap

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robolove
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Edward Jones trap

Post by robolove » Wed Nov 29, 2017 10:36 am

My sister and her husband switched to Edward Jones and I want to persuade them to leave... her mother-in-law introduced EJ to them.

Anybody been in a similar situation and can share some advice? Should I just not even bother?

Sister said, “Since we've switched to Edward Jones, our returns have been really good. Like 15-22% good. I'm willing to pay 1.3% for better returns than I could've ever done on my own.“

We live in different countries. I plan to send them “boglehead’s guide to investing” for X-mas.

magicrat
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Re: Edward Jones trap

Post by magicrat » Wed Nov 29, 2017 10:41 am

Stay out of it unless they ask you for advice. Not your life, not your problem.

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dm200
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Re: Edward Jones trap

Post by dm200 » Wed Nov 29, 2017 10:43 am

magicrat wrote:
Wed Nov 29, 2017 10:41 am
Stay out of it unless they ask you for advice. Not your life, not your problem.
I agree.

You cannot "win"

livesoft
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Re: Edward Jones trap

Post by livesoft » Wed Nov 29, 2017 10:43 am

Ha! Everybody else made 16% to 30%, so I would not be satisfied with 15% to 25%. But there is not much you can do.
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renue74
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Re: Edward Jones trap

Post by renue74 » Wed Nov 29, 2017 10:46 am

They didn't ask for your input. I have friends with EJ. If we ever bring it up during dinners, I always say EJ is a bad FA and that they pile on hidden fees that clients have difficulty finding. It never sways them. I'm just making small talk and know they won't ever move.

It's like Hawaii Life on HGTV...you know, that show that comes on Sundays where they show mostly healthcare professionals who are relocating to the islands and looking for housing. "If you want to live in Hawaii, you have to want it!" (Tag line for real estate agent guy)

If you want to leave EJ, you have to want it.

clutchied
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Re: Edward Jones trap

Post by clutchied » Wed Nov 29, 2017 1:32 pm

this is one of those situation where they'll never know what they're missing.

If you convince them to switch the market will tank and it will be your fault.

bloom2708
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Re: Edward Jones trap

Post by bloom2708 » Wed Nov 29, 2017 1:37 pm

You really can't win.

One idea:

Search, find and print 10 or 20 longer "Leaving Edward Jones" threads from here. Make a 50-100 page printout discussing the issue in detail.

Hand it to them and say "This is some discussion about Edward Jones from Bogleheads.org...."

I know, I know, it is probably a terrible idea. But if you must take some action, what action could spur further research and reading?

Many, many people are in the "they do not know what they do not know" stage about many things.

You probably can't win and staying out of it is the best/easiest scenario for you.
"We are not here to agree with you; we are here to provoke thoughtfulness." Unknown Boglehead

sschoe2
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Re: Edward Jones trap

Post by sschoe2 » Wed Nov 29, 2017 1:42 pm

One of my favorite bits of wisdom:

"When someone does a foolish thing, you should tell them it is a foolish thing. They can still continue to do it, but at least the truth is where it needs to be."

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greg24
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Re: Edward Jones trap

Post by greg24 » Wed Nov 29, 2017 1:46 pm

This only sounds like a trap for you. Don't step in it.

racy
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Re: Edward Jones trap

Post by racy » Wed Nov 29, 2017 1:48 pm

You might show them what that 1.3% fee will cost them over the next couple of decades. http://buyupside.com/calculators/feesdec07.htm
That single digit fee will balloon!!

barnaclebob
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Re: Edward Jones trap

Post by barnaclebob » Wed Nov 29, 2017 2:04 pm

robolove wrote:
Wed Nov 29, 2017 10:36 am
My sister and her husband switched to Edward Jones and I want to persuade them to leave... her mother-in-law introduced EJ to them.

Anybody been in a similar situation and can share some advice? Should I just not even bother?

Sister said, “Since we've switched to Edward Jones, our returns have been really good. Like 15-22% good. I'm willing to pay 1.3% for better returns than I could've ever done on my own.“

We live in different countries. I plan to send them “boglehead’s guide to investing” for X-mas.
The vast majority of people are afraid to mess up their money. Counter intuitively they will almost always give control of their money to the first recommended person they talk to because that's what feels safe when that might be a terrible thing to do. Unless you can somehow bring up that you got better returns with no skills or that the S&P was up more than that during their invested time then you'll be hard pressed to fix them.

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oldcomputerguy
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Re: Edward Jones trap

Post by oldcomputerguy » Wed Nov 29, 2017 2:07 pm

robolove wrote:
Wed Nov 29, 2017 10:36 am
My sister and her husband switched to Edward Jones and I want to persuade them to leave... her mother-in-law introduced EJ to them.
Mmm... this is a minefield. You run the risk of alienating not only your sister and her husband but the mother-in-law as well. Be really careful.
Sister said, “Since we've switched to Edward Jones, our returns have been really good. Like 15-22% good. I'm willing to pay 1.3% for better returns than I could've ever done on my own.“
That's not because of EJ, it's because the market is wildly up. For example, a three-fund 80/20 portfolio of VTSAX (56%), VTIAX (24%) and VBTLX (20%) would be up 19% year-to-date without EJ even being involved.

Do the investments that their EJ "guy" has them in involve front-end loads? You might check and, if so, point out how the EJ "guy" is pocketing 5% or more of their money up front.

You might also show them some history from other EJ customers.
"I’ve come around to this: If you’re dumb, surround yourself with smart people; and if you’re smart, surround yourself with smart people who disagree with you." (Aaron Sorkin)

bberris
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Re: Edward Jones trap

Post by bberris » Wed Nov 29, 2017 2:10 pm

The reason for paying a 1.3 % management fee is to have someone to blame when things go south. Maybe it's worth it to them.

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flamesabers
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Re: Edward Jones trap

Post by flamesabers » Wed Nov 29, 2017 3:13 pm

magicrat wrote:
Wed Nov 29, 2017 10:41 am
Stay out of it unless they ask you for advice. Not your life, not your problem.
+1.

Your sister and brother-in-law are adults who can make their own decisions. So long as they don't try to persuade you to become an EJ customer, I think it's best to avoid the topic of EJ with them.

NotWhoYouThink
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Re: Edward Jones trap

Post by NotWhoYouThink » Wed Nov 29, 2017 3:52 pm

Switched to EF from where? A low interest savings account? A portfolio consisting mainly of the stock of the company from which they get most of their income? An incoherent blend of stuff someone else sold them once? Bitcoin?

It's entirely possible that they will do better with EJ than they were doing or would ever do on their own.

I wouldn't even consider moving my money to EJ because I prefer a low cost DIY approach and have the discipline to form a plan and stick to it. But not everyone is like that, and some people are just a hot mess with their money. EJ is not a Ponzi scheme, and their agents do not have a reputation for directing client's money to Caribbean banks and following it there. You'll probable make better investment choices for yourself than EJ, but maybe not. Let it go. If they develop a sudden interest in financial management you can talk to them then.

abner kravitz
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Re: Edward Jones trap

Post by abner kravitz » Wed Nov 29, 2017 3:57 pm

I have relatives with Edward Jones. I would never in a million years suggest they move, unless they asked specifically.

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Alexa9
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Re: Edward Jones trap

Post by Alexa9 » Wed Nov 29, 2017 4:15 pm


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Toons
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Re: Edward Jones trap

Post by Toons » Wed Nov 29, 2017 5:00 pm

Leave them alone.
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mptfan
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Re: Edward Jones trap

Post by mptfan » Wed Nov 29, 2017 5:09 pm

Did they ask for your advice?

white_water
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Re: Edward Jones trap

Post by white_water » Wed Nov 29, 2017 5:20 pm

A long time friend was sold 5 % front end load actively managedfunds from EJ. He knows the difference between load vs no-load and I showed him my N.L. index fund choices from VG and Fido. But he's still with E.J. " because his late father was a client."

Some times you just have to walk away.

MrPotatoHead
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Re: Edward Jones trap

Post by MrPotatoHead » Wed Nov 29, 2017 11:18 pm

Something I learned as a small business consultant. A fool and their money are always parted. After checking in with old clients that I steered away from bad franchises or businesses opportunities I noticed that they simply found yet another way to get fleeced. In the end, after decades and decades of dealing with people I have concluded sheep are going to get sheared.

I suggest you just walk away.

sambb
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Re: Edward Jones trap

Post by sambb » Wed Nov 29, 2017 11:55 pm

they could do far worse, even in vanguard with nervousness, timing, picking wrong funds[.
Seems like they are doing ok. They might be correct..

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beyou
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Re: Edward Jones trap

Post by beyou » Thu Nov 30, 2017 12:01 am

Sounds like you need a deprogrammer to get them out of a cult.

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burt
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Re: Edward Jones trap

Post by burt » Thu Nov 30, 2017 7:25 am

I am currently helping a relative and their spouse move funds from Edward Jones to Vanguard.
This all started when they inherited funds located at Vanguard.
I explained to them that by also transferring their existing EJ funds they could save more than $100,000 in fees and expenses over 20 years. Their response was silence with a blank unemotional expression.

These are the same people who get excited when tuna fish is on sale at the grocery store, or the local bar has $1 hot dog night.

I just don't get it.

burt

mptfan
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Re: Edward Jones trap

Post by mptfan » Thu Nov 30, 2017 7:31 am

burt wrote:
Thu Nov 30, 2017 7:25 am
These are the same people who get excited when tuna fish is on sale at the grocery store, or the local bar has $1 hot dog night.

I just don't get it.
People have to pull money out of their pocket and engage a transaction to pay for tuna fish or hot dogs, whereas the fees extracted by financial advisors are hidden and people do not have to do anything to pay them, the fees are taken "off the top" so seamlessly that many people don't even realize they are paying anything at all.
Last edited by mptfan on Thu Nov 30, 2017 7:35 am, edited 1 time in total.

Mr.BB
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Re: Edward Jones trap

Post by Mr.BB » Thu Nov 30, 2017 7:33 am

racy wrote:
Wed Nov 29, 2017 1:48 pm
You might show them what that 1.3% fee will cost them over the next couple of decades. http://buyupside.com/calculators/feesdec07.htm
That single digit fee will balloon!!
+1
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."

Michread
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Re: Edward Jones trap

Post by Michread » Thu Nov 30, 2017 7:56 am

Send them the link to John Oliver show on retirement. Losing 2/3 of their money through compounding fees may open their eyes. :oops:

https://www.youtube.com/watch?v=gvZSpET11ZY

dbr
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Re: Edward Jones trap

Post by dbr » Thu Nov 30, 2017 9:06 am

mptfan wrote:
Thu Nov 30, 2017 7:31 am
burt wrote:
Thu Nov 30, 2017 7:25 am
These are the same people who get excited when tuna fish is on sale at the grocery store, or the local bar has $1 hot dog night.

I just don't get it.
People have to pull money out of their pocket and engage a transaction to pay for tuna fish or hot dogs, whereas the fees extracted by financial advisors are hidden and people do not have to do anything to pay them, the fees are taken "off the top" so seamlessly that many people don't even realize they are paying anything at all.
It might be worse; they can be thinking that they know they are not paying anything at all. Their broker may have even lied and told them they were paying nothing. Some brokers claim that commissions (including loads) and fund expenses are not fees and tell customers there are no fees.

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ruralavalon
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Re: Edward Jones trap

Post by ruralavalon » Thu Nov 30, 2017 9:28 am

magicrat wrote:
Wed Nov 29, 2017 10:41 am
Stay out of it unless they ask you for advice. Not your life, not your problem.
I agree.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

Call_Me_Op
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Re: Edward Jones trap

Post by Call_Me_Op » Thu Nov 30, 2017 9:33 am

magicrat wrote:
Wed Nov 29, 2017 10:41 am
Stay out of it unless they ask you for advice. Not your life, not your problem.
Strongly agree. You will manage to get them to change custodian right before the next major melt-down and you will be blamed for their losses. Been there, never fully recovered the relationship.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

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jadd806
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Re: Edward Jones trap

Post by jadd806 » Thu Nov 30, 2017 9:43 am

clutchied wrote:
Wed Nov 29, 2017 1:32 pm
this is one of those situation where they'll never know what they're missing.

If you convince them to switch the market will tank and it will be your fault.
Yup. Even if it tanks years from now. The second you offer advice is the second you assume responsibility for whatever happens to their portfolio.

They'll claim the EJ rep would have made them more during the run up, and gotten them out before the crash.

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CAsage
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Re: Edward Jones trap

Post by CAsage » Thu Nov 30, 2017 12:55 pm

I have had snooty friends with financial advisers tell me that 'you get what you pay for" and that I would be sorry in the long run for managing my own investments when the professionals do soooooooooooooo much better. I think they view it as a status thing - "My finance guy says this or that..." I quit trying. Not your monkey, not your circus.
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.

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nedsaid
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Re: Edward Jones trap

Post by nedsaid » Fri Dec 01, 2017 8:38 am

MrPotatoHead wrote:
Wed Nov 29, 2017 11:18 pm
Something I learned as a small business consultant. A fool and their money are always parted. After checking in with old clients that I steered away from bad franchises or businesses opportunities I noticed that they simply found yet another way to get fleeced. In the end, after decades and decades of dealing with people I have concluded sheep are going to get sheared.

I suggest you just walk away.
That sounds about right. I have found that people who I have tried to help really didn't want it. Yes, a fool and his money are good for business.
A fool and his money are good for business.

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4nursebee
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Re: Edward Jones trap

Post by 4nursebee » Fri Dec 01, 2017 8:48 am

It is rare that the specifics of investing occur with my peers. Facts thus far have failed to persuade anyone to change.
4nursebee

lostdog
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Re: Edward Jones trap

Post by lostdog » Fri Dec 01, 2017 9:54 am

I made the mistake years ago of trying g to explain low cost index funds to a friend. His family invests with a high cost loaded active funds firm. At the time it was called Lutheran Brotherhood. They have a new name now and I forget what it is. Anyway he got really defensive and we went back and forth with numbers. My numbers won but he even got more defensive and came up with other excuses. It was a waste of my time and I am glad it didn't hurt our friendship. Be very very careful. When you back someone in a corner they will try to run right through you most of the time.
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fishandgolf
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Re: Edward Jones trap

Post by fishandgolf » Fri Dec 01, 2017 10:04 am

dm200 wrote:
Wed Nov 29, 2017 10:43 am
magicrat wrote:
Wed Nov 29, 2017 10:41 am
Stay out of it unless they ask you for advice. Not your life not your problem.
I agree.

You cannot "win"
+1
Absolutely, positively, unequivocally for certain......you can't win.

My sister and her DH are ready to retire; they're have a very sizable seven figure portfolio; I've give them enough information and examples of what they're paying their FA and what they could save by using Vanguard's PAS.......doesn't matter.......they just don't want to deal with any part of it. :oops:

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jadd806
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Re: Edward Jones trap

Post by jadd806 » Fri Dec 01, 2017 12:00 pm

CAsage wrote:
Thu Nov 30, 2017 12:55 pm
I have had snooty friends with financial advisers tell me that 'you get what you pay for" and that I would be sorry in the long run for managing my own investments when the professionals do soooooooooooooo much better. I think they view it as a status thing - "My finance guy says this or that..." I quit trying. Not your monkey, not your circus.
I have noticed this as well. It's definitely a status thing to mention your Financial Advisor, as in their minds it signals to others that "I have so much extra money that I barely know what to do with it!"

I was interacting with one such couple once. They kept bringing up their FA and the investments that he had them in. They both kept referring to this hot stock called "Tellsa" and how their FA had shifted a large portion of their assets into it because it was going to make huge gains. It took me a while to figure out that they were referring to Tesla (TSLA).

I usually just listen to these people and nod while filing the conversation away to chuckle about later.

limeyx
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Re: Edward Jones trap

Post by limeyx » Fri Dec 01, 2017 7:42 pm

dm200 wrote:
Wed Nov 29, 2017 10:43 am
magicrat wrote:
Wed Nov 29, 2017 10:41 am
Stay out of it unless they ask you for advice. Not your life, not your problem.
I agree.

You cannot "win"
Agreed. My neighbor did the same and I just smiled and said "Thats awesome that you are happier than with the other guy you hated"

Helo80
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Re: Edward Jones trap

Post by Helo80 » Fri Dec 01, 2017 7:50 pm

Not your life and not your money. If people aren't giving you unsolicited financial advice, you shouldn't either.

If she asks you what your thoughts are, by all means, you have the blessing to lay it into EJ.

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badbreath
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Re: Edward Jones trap

Post by badbreath » Fri Dec 01, 2017 8:22 pm

Not your life and not your money. If people aren't giving you unsolicited financial advice, you shouldn't either.
One of my co workers said he had most of his after tax in with Ed Jones and I said that may not be the best for your funds. He immediately said this guy is killing it and I can't invest without him I gave up. I just shut up and thought, oh well he will learn sooner or later.
“While money can’t buy happiness, it certainly lets you choose your own form of misery.” Groucho Marx

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sergeant
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Re: Edward Jones trap

Post by sergeant » Fri Dec 01, 2017 8:26 pm

Don't bother. No upside for you and any market correction would not have happened if she had stayed at EJ.
Lincoln 3 EOW!

FireHorse
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Re: Edward Jones trap

Post by FireHorse » Fri Dec 01, 2017 8:41 pm

We inherited a sum amount of money with Edward Jones, we learned that when we sell/buy stocks, EJ charges us 1% commission plus $4.95 transaction fee.
Our understanding is that as long as we don't buy/sell and not making any transactions, there are no fees to be charged.
Are we correct?

AnimalSpirits
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Re: Edward Jones trap

Post by AnimalSpirits » Sat Dec 02, 2017 2:10 am

ln09348 wrote:
Fri Dec 01, 2017 8:41 pm
We inherited a sum amount of money with Edward Jones, we learned that when we sell/buy stocks, EJ charges us 1% commission plus $4.95 transaction fee.
Our understanding is that as long as we don't buy/sell and not making any transactions, there are no fees to be charged.
Are we correct?
No, there is probably an additional 1.3% expense ratio annually taken from your money.
I'm interested to know how they respond to "how much in fees $$$ total did I pay out of my account this year."

mancich
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Re: Edward Jones trap

Post by mancich » Sat Dec 02, 2017 6:32 am

My dear departed mother used to say it best: MYOB "Mind your own business". It is enough to follow the Boglehead way and let other people do it their way. If they ask your opinion or for advice, that is a different story. :beer

alex11
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Re: Edward Jones trap

Post by alex11 » Sat Dec 02, 2017 7:21 am

ln09348 wrote:
Fri Dec 01, 2017 8:41 pm
We inherited a sum amount of money with Edward Jones, we learned that when we sell/buy stocks, EJ charges us 1% commission plus $4.95 transaction fee.
Our understanding is that as long as we don't buy/sell and not making any transactions, there are no fees to be charged.
Are we correct?
This would be true if you are holding individual stocks as opposed to mutual funds. If your entire account has single stock holdings, you will pay the commission/transaction fee when buying and selling. With most online brokers you can do this for under $10 per trade. I am familiar with most of their practices, but was not familiar with the 1% fee. If this is true, a $100,000 sell would cost you over $1,000 vs $10 from another broker, and this is typically done on the way in and out.

To answer the OP's question. My PARENTS made the mistake of choosing Edward Jones upon retirement, and I felt obligated to intervene. They brought in $500,000, all of which was invested in 5.25% front load funds. So, their account immediately dropped over $26,000. I'm not sure they even realized what happened here as I was not viewing the account at this time, but I was able to show them about 2 years later when they put another 60k in, the 5.25% decrease the very next day. This, along with a sit down(in writing) comparison of the dollar amount in fees, I was finally able to convince them to make the change.

With that being said, these are my parents, whom we are very close with. I made sure to cover all bases about the possibility of a declining market.

I used to offer advice to fellow workers, but those days are gone. One fellow was offended so bad that he will not even look my direction anymore. Most just do not know anything about money, so it's a pretty easy sale for their FA.

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Re: Edward Jones trap

Post by Grt2bOutdoors » Sat Dec 02, 2017 7:33 am

lostdog wrote:
Fri Dec 01, 2017 9:54 am
I made the mistake years ago of trying g to explain low cost index funds to a friend. His family invests with a high cost loaded active funds firm. At the time it was called Lutheran Brotherhood. They have a new name now and I forget what it is. Anyway he got really defensive and we went back and forth with numbers. My numbers won but he even got more defensive and came up with other excuses. It was a waste of my time and I am glad it didn't hurt our friendship. Be very very careful. When you back someone in a corner they will try to run right through you most of the time.
The new name is Thrivent. Same outfit, different name.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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ps56k
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Re: Edward Jones trap

Post by ps56k » Tue Jul 16, 2019 5:01 pm

I am now facing this situation with our son...

Over the years I had setup a Schwab brokerage account for him - as a toddler - and then aged out to normal status.
It was mostly kid stocks, and then later on added some vanilla ETFs like VTI and other segments.

Just recently setup a Vanguard Roth IRA - and used the Target Date Fund for keeping it plain and simple.

Now - he is in California (we are in Chicago) and is getting married...
His wife's family have an Edward/Jones advisor - and think he is great - and doing a fantastic job.
I'm not sure what will happen....
but hard to have the conversation from so far away,
and with the emotional attachment of the other famiy... I fear logic will not prevail -

barnaclebob
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Re: Edward Jones trap

Post by barnaclebob » Tue Jul 16, 2019 5:06 pm

ps56k wrote:
Tue Jul 16, 2019 5:01 pm
I am now facing this situation with our son...

Over the years I had setup a Schwab brokerage account for him - as a toddler - and then aged out to normal status.
It was mostly kid stocks, and then later on added some vanilla ETFs like VTI and other segments.

Just recently setup a Vanguard Roth IRA - and used the Target Date Fund for keeping it plain and simple.

Now - he is in California (we are in Chicago) and is getting married...
His wife's family have an Edward/Jones advisor - and think he is great - and doing a fantastic job.
I'm not sure what will happen....
but hard to have the conversation from so far away,
and with the emotional attachment of the other famiy... I fear logic will not prevail -
Not much you can do to convince them that the EJ guy who asks how little Timmy is doing in soccer and how your sons last fishing trip went is really taking 30% of their retirement funds. People don't actually care about being in good hands, they just want to feel like they are. Is your son's wife's family well off? Many of the people who are high earners with EJ like to tout the skills of "their guy" for because it makes them feel smart. They don't realize their high earnings and good stock market returns are whats really powering the ship that not even a few barnacles will slow down. I have to grit my teeth every time someone at work retires and tells everyone to find a good money guy. The folks my age and younger (under 35) seem to get it though.
Last edited by barnaclebob on Tue Jul 16, 2019 5:13 pm, edited 1 time in total.

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ps56k
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Re: Edward Jones trap

Post by ps56k » Tue Jul 16, 2019 5:12 pm

Just to wander slightly off topic ....

I think it has been mentioned that some of the Edward/Jones fees may involve -
- a $4.95 trading fee + a 1% fee on the same trade ... is that correct ?
- a 1.3% fee on AUM... guessing that some holdings are in their "managed accounts" and some are not ?
- anything else - besides the implied Sales Load - or Back End fees - on certain funds ?
- are there also "commissions" - or are those baked into the Sale Load / Back End fees ?

NOW - what about the managed or "advisor" offerings from..... everyone else -
how do their fees compare to Edward/Jones ?

- Schwab advisor services
- Vanguard advisor services
- Fidelity advisor services
- Chase Private Client services
- etc ...

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Stinky
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Joined: Mon Jun 12, 2017 11:38 am
Location: Sweet Home Alabama

Re: Edward Jones trap

Post by Stinky » Tue Jul 16, 2019 5:14 pm

ps56k wrote:
Tue Jul 16, 2019 5:01 pm

Now - he is in California (we are in Chicago) and is getting married...
His wife's family have an Edward/Jones advisor - and think he is great - and doing a fantastic job.
I'm not sure what will happen....
but hard to have the conversation from so far away,
and with the emotional attachment of the other famiy... I fear logic will not prevail -
Give your son and his new bride a copy of “The Bogleheads Guide to Investing” as a wedding gift. Put a little card in the book, saying that the investment principles in the book are what you follow.

Then stand back and do nothing. Your son and his bride will need to work this out.
It's a GREAT day to be alive - Travis Tritt

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