Edward Jones

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macreel
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Edward Jones

Post by macreel » Fri Mar 30, 2018 5:20 pm

So I inherited a brokerage account and a beneficiary IRA, I also already have a ROTH and Trad IRA. I made the mistake of transferring my assets to Edward Jones and realized this when reading " A Random Walk Down Wall Street". I am in the process now of transferring my assets to Vanguard. I have just turned 29. My questions are as follows.

1) I have individual stocks and mutual funds in my brokerage account, when balancing my portfolio to have an 80/20 stocks bond ratio, Do I take into consideration the individual stocks I already own? Like do I need to add the individual stock portion into that 80/20? Or do I balance the 80/20 allocation with what I have available for index funds?

2) Does anyone know exactly what Edward Jones charges yearly for mutual funds in a brokerage account? I know they charge 1.35 yearly (guided solutions) in my retirement account.

3) I can't decide between the total market index and a tilt towards a small cap index or should I get the 500 index, mid cap index and small cap index separately? also will be getting emerging markets index and developed markets index and a reit.

4) Any advice on which bond funds to get and how many different ones right now?

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FiveK
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Re: Edward Jones

Post by FiveK » Fri Mar 30, 2018 8:01 pm

macreel, welcome to the forum.

Asset allocation applies to all investments, whether individual items or mutual funds.

Don't know exactly what EJ charges but it's a safe bet that "more than Vanguard" is correct.

Particularly for someone just starting - but also for many experienced investors, and particularly in tax-advantaged accounts - but also for taxable accounts when the bond percentage is low, target retirement date funds or "LifeStrategy" funds are very much worth considering.

No way to know what "tilt" will outperform in the years ahead. See https://www.bogleheads.org/wiki/Three-fund_portfolio for more thoughts.

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Nestegg_User
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Re: Edward Jones

Post by Nestegg_User » Fri Mar 30, 2018 8:25 pm

macreel wrote:
Fri Mar 30, 2018 5:20 pm
So I inherited a brokerage account and a beneficiary IRA, I also already have a ROTH and Trad IRA. I made the mistake of transferring my assets to Edward Jones and realized this when reading " A Random Walk Down Wall Street". I am in the process now of transferring my assets to Vanguard. I have just turned 29. My questions are as follows.

1) I have individual stocks and mutual funds in my brokerage account, when balancing my portfolio to have an 80/20 stocks bond ratio, Do I take into consideration the individual stocks I already own? Like do I need to add the individual stock portion into that 80/20? Or do I balance the 80/20 allocation with what I have available for index funds?

2) Does anyone know exactly what Edward Jones charges yearly for mutual funds in a brokerage account? I know they charge 1.35 yearly (guided solutions) in my retirement account.

3) I can't decide between the total market index and a tilt towards a small cap index or should I get the 500 index, mid cap index and small cap index separately? also will be getting emerging markets index and developed markets index and a reit.

4) Any advice on which bond funds to get and how many different ones right now?
If you read any of the multitude of EJ threads, you will find that the fees are substantial. *** JUST GET OUT *** whether it’s vanguard, schwab, fidelity... just get out and stop the hemorrhaging. Then decide what your portfolio should be and IF you want the “assistance” at much lower rates (0.3-0.5%) and where you CAN terminate the assistance in the future (vs EJ, where you CANNOT); most of us don’t need any and are DIY investors.

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mhadden1
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Re: Edward Jones

Post by mhadden1 » Fri Mar 30, 2018 8:39 pm

BogleHeads thinking is that lower fees keeps more money in the investor pocket. That leaves Edward Jones out AFAIK.
Oh I can't, can I? That's what they said to Thomas Edison, mighty inventor, Thomas Lindberg, mighty flyer,and Thomas Shefsky, mighty like a rose.

pkcrafter
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Re: Edward Jones

Post by pkcrafter » Fri Mar 30, 2018 8:52 pm

What funds does EJ have you in? List names and tickers. Don't need all of them because we know it's more than you really need. Just need 4-5 with expense ratios if you know them. You will pay the 1.35%, plus the fund expenses, plus transaction fees and other misc fees.

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

TwstdSista
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Re: Edward Jones

Post by TwstdSista » Sat Mar 31, 2018 4:01 am

OMGoodness, leave EJ fast. But keep in mind trade fees. EJ is famous for putting you into 12 or so funds, all which might have a $20 fee at another institution.

It *might* be less expensive to sell at EJ.

twhite5262
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Re: Edward Jones

Post by twhite5262 » Sat Mar 31, 2018 7:55 am

I have taxable American funds with EJ that have ER about .6 of which they get 25% of that fee. Have not seen trading fees when TLH . They do offer more managed service for about 1.2% but I don't subscribe. Still get to converse with my local advisor. Other 50% of my portfolio in tax deferred in Vanguard Target fund .

JW-Retired
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Re: Edward Jones

Post by JW-Retired » Sat Mar 31, 2018 9:10 am

macreel wrote:
Fri Mar 30, 2018 5:20 pm
2) Does anyone know exactly what Edward Jones charges yearly for mutual funds in a brokerage account? I know they charge 1.35 yearly (guided solutions) in my retirement account.
Chances are they make about the same in a different way. Their long practice has been selling you funds with high front or back loads and/or 12b-1 fees kicked back to them yearly. The recent change away from that to an AUM of 1.35% is the result a new Department of Labor so-called fiduciary rule that went into effect this year, but it only applies to retirement accounts.

Don't know, but my guess is they picked the 1.35% number so they will keep on bleeding their retirement account clients about the same amount per year that the old model gave them.
JW
Retired at Last

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BL
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Re: Edward Jones

Post by BL » Sat Mar 31, 2018 10:03 am

1) I have individual stocks and mutual funds in my brokerage account, when balancing my portfolio to have an 80/20 stocks bond ratio, Do I take into consideration the individual stocks I already own? Like do I need to add the individual stock portion into that 80/20? Or do I balance the 80/20 allocation with what I have available for index funds?
Since this was inherited, you probably got a stepped-up value at date of death in your taxable account, and only have long term capital gains, if any, on any increase since then. This would be the ideal time to sell them, and buy tax-efficient index funds such as Total Stock Market and Total International Stock Market. You could put your bonds in your inherited IRA and them fill up with stock funds.

To answer your question, stocks are stocks, so would be included with stock index funds in figuring out your AA. Don't hold on to stocks for sentimental reasons.

I would get a list of all your funds that you consider transferring in-kind to V, and call V to see which can be transferred and what it will cost to sell them there. I don't think they charge to sell American funds bought with a load, but am not sure. No idea what EJ charges. The simplest might be to have EJ sell everything.

If you want an adviser, not a salesperson like you currently have, Vanguard's PAS would set things up and maybe after a year or so, you might decide to go it on your own. Only 0.3%/year and low-ER funds.

Here is a great little pdf with basics of investing and personal finance:
https://www.etf.com/docs/IfYouCan.pdf

The Wiki here has several great pages you can search for:
Getting started
Windfall
3-fund portfolio
tax-efficient funds (for brokerage/taxable account)

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ruralavalon
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Re: Edward Jones

Post by ruralavalon » Sat Mar 31, 2018 12:05 pm

Welcome to the forum :) .


macreel wrote:
Fri Mar 30, 2018 5:20 pm
So I inherited a brokerage account and a beneficiary IRA, I also already have a ROTH and Trad IRA. I made the mistake of transferring my assets to Edward Jones and realized this when reading " A Random Walk Down Wall Street". I am in the process now of transferring my assets to Vanguard. I have just turned 29. My questions are as follows.
That is an excellent choice in reading material.

It is a very good idea to get away from Edward Jones, and move your accounts to Vanguard and use low expense mutual funds.


macreel wrote:
Fri Mar 30, 2018 5:20 pm
1) I have individual stocks and mutual funds in my brokerage account, when balancing my portfolio to have an 80/20 stocks bond ratio, Do I take into consideration the individual stocks I already own? Like do I need to add the individual stock portion into that 80/20? Or do I balance the 80/20 allocation with what I have available for index funds?
If you keep any individual stocks, yes count them in your stock allocation.

But I suggest instead broad diversification using stock mutual funds. Strive for a combination of broad diversification (to reduce risk) and low expense ratios (to increase your net gain). To simply and easily achieve those two goals I suggest choosing funds to simulate the very well diversified, low expense ratio "three-fund portfolio". Wiki article "Three-fund portfolio". Forum discussion, "The Three-Fund Portfolio".


macreel wrote:
Fri Mar 30, 2018 5:20 pm
2) Does anyone know exactly what Edward Jones charges yearly for mutual funds in a brokerage account? I know they charge 1.35 yearly (guided solutions) in my retirement account.
Edward Jones charges a lot.

Saving that 1.35% yearly guided solutions fee is reason enough by itself to move your accounts.

You will also save on annual expense ratios for the funds used.

Low expense ratios are critical to long-term investing performance. Seemingly small annual fees have a large cumulative impact over time. Vanguard blog post, "Stopping the silent killer of returns". Please see the table at the end of the post, "Cumulative impact of fees on ending wealth at various time horizons." Also, here is a calculator you could use to estimate the impact of investing expenses. Bankrate.com, "Mutual fund fees calculator".

Also, low expense ratios are the best predictor of future performance. Morningstar article . “If there's anything in the whole world of mutual funds that you can take to the bank, it's that expense ratios help you make a better decision. In every single time period and data point tested, low-cost funds beat high-cost funds.” “Investors should make expense ratios a primary test in fund selection. They are still the most dependable predictor of performance.”



macreel wrote:
Fri Mar 30, 2018 5:20 pm
3) I can't decide between the total market index and a tilt towards a small cap index or should I get the 500 index, mid cap index and small cap index separately? also will be getting emerging markets index and developed markets index and a reit.

For domestic stocks I suggest simply using a total stock market index fund where available. I suggest Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) ER 0.04%.

For international stocks I suggest using just Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) ER 0.11%. The fund covers both developed and emerging markets.

For REITs I suggest Vanguard Real Estate Index Fund Admiral Shares (VGSLX) ER 0.12%.


macreel wrote:
Fri Mar 30, 2018 5:20 pm
4) Any advice on which bond funds to get and how many different ones right now?
I suggest either:
1) Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) ER 0.05%; or
2) Vanguard Intermediate-Term Bond Index Fund Admiral Shares (VBILX) ER 0.07%.

I personally use just Vanguard Intermediate-Term Bond Index Fund Admiral Shares (VBILX).
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

Alan S.
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Re: Edward Jones

Post by Alan S. » Sat Mar 31, 2018 1:03 pm

Don't ask for the same deal your EJ advisor gets. That's not good either:

https://www.bna.com/edward-jones-cant-n57982090454/

radiowave
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Re: Edward Jones

Post by radiowave » Sat Mar 31, 2018 1:18 pm

OP, welcome.

Vanguard does not reimburse fees and there may be some EJ funds that Vanguard will charge to sell. Fidelity and I believe but not sure Schwab, will reimburse fees for closing out an account at another broker. Fidelity regularly has incentives for moving depending on how big a portfolio. Both Fidelity and Schwab have equivalent total stock, total international, and total bond funds that are low cost index funds and well diversified. Just giving you some options to consider, not trying to deter you from Vanguard. When I moved my inherited IRA from my dad, I believe there was a closing fee of $95 and 135 for a taxable account. You will be much happier out of EJ.
Bogleheads Wiki: https://www.bogleheads.org/wiki/Main_Page

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Q's Laptop
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Re: Edward Jones

Post by Q's Laptop » Sat Mar 31, 2018 1:27 pm

macreel wrote:
Fri Mar 30, 2018 5:20 pm

2) Does anyone know exactly what Edward Jones charges yearly for mutual funds in a brokerage account? I know they charge 1.35 yearly (guided solutions) in my retirement account.
I just left Edward Jones. You will hear a lot of uninformed opinions on this forum about EJ from people that have no idea how they operate and merely repeat horror stories they've read here.

That said, there are a couple of possibilities for the fees that EJ charges in a taxable brokerage account.

1. If the securities in the account are mutual funds they were probably front-end load funds. The purchaser paid a percent fee based on the dollar amount of the overall value of the holdings in the account. For example, if the dollar amount was:
$50,000 and less, the load charged was 5.75%
$50,000 to $100,000, the load was 4.5%
$100,000 to $500,000, the load was 3.5%
and so on, until you get to $2M or more and there is no charge.

Example: The original purchaser invested $100,000 in several mutual funds. EJ took their fee of $3,500 and only $96,500 worth of mutual funds were actually purchased.

If this is the case, the fee has already been paid and there is no ongoing fees out of pocket. (Of course there are annual expense fees related to the mutual funds.) The need to leave this account isn't so clear cut as an account that charges ongoing fees, but it's almost a certainty that you can do better with other mutual funds at Fidelity or Vanguard. There are some good funds available through EJ, however.

If you stay, exchanges within the same fund family may be done with no fees. That is, American Funds mutual funds may be exchanged within the family of American Funds and there is no fees charged for the transactions. Any new purchases would be charged the front-end load, however, it doesn't sound like you will be making any new purchases at EJ.

2. The brokerage account is an "asset under management" account (AUM), and is subject to a percent fee, typically 1.35% of the total account value. An easy way to determine if the account is an AUM account is to look at the 1099-DIV statements, in the fees charged portion. Or you could simply call the EJ rep that handles the account and ask them. You need to flee from this sort of an account.

The new fiduciary rule for IRAs and the resultant conversion to my IRAs becoming AUM accounts with a 1.35% annual fee was the straw that broke the camel's back for me. I moved everything to Fidelity. I ended up keeping a couple of the mutual funds from EJ. My reasoning was that I'd already paid the load (over 10 years ago), I didn't eat too incur the capital gains, the funds were high quality funds with relatively low expenses and the holdings within the funds were different compared to what Fidelity had to offer in that asset class. For example I kept ANEFX, ANWPX, and FKDNX.

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ruralavalon
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Re: Edward Jones

Post by ruralavalon » Sat Mar 31, 2018 1:48 pm

radiowave wrote:
Sat Mar 31, 2018 1:18 pm
OP, welcome.

Vanguard does not reimburse fees and there may be some EJ funds that Vanguard will charge to sell. Fidelity and I believe but not sure Schwab, will reimburse fees for closing out an account at another broker. Fidelity regularly has incentives for moving depending on how big a portfolio. Both Fidelity and Schwab have equivalent total stock, total international, and total bond funds that are low cost index funds and well diversified. Just giving you some options to consider, not trying to deter you from Vanguard. When I moved my inherited IRA from my dad, I believe there was a closing fee of $95 and 135 for a taxable account. You will be much happier out of EJ.
One minor correction, Schwab does not have a total international stock index fund. Schwab International Index Fund covers only larger companies, only in developed markets, excluding Canada.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

smitcat
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Re: Edward Jones

Post by smitcat » Sat Mar 31, 2018 2:02 pm

Perhaps read a couple dozen of these....

https://www.consumeraffairs.com/finance ... jones.html

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Q's Laptop
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Re: Edward Jones

Post by Q's Laptop » Sat Mar 31, 2018 2:43 pm

smitcat wrote:
Sat Mar 31, 2018 2:02 pm
Perhaps read a couple dozen of these....

https://www.consumeraffairs.com/finance ... jones.html
Sounds like some of those people wouldn't know how to turn on a lamp.

smitcat
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Re: Edward Jones

Post by smitcat » Sat Mar 31, 2018 4:59 pm

Q's Laptop wrote:
Sat Mar 31, 2018 2:43 pm
smitcat wrote:
Sat Mar 31, 2018 2:02 pm
Perhaps read a couple dozen of these....

https://www.consumeraffairs.com/finance ... jones.html
Sounds like some of those people wouldn't know how to turn on a lamp.
https://www.bloomberg.com/gadfly/articl ... sting-fees

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Q's Laptop
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Re: Edward Jones

Post by Q's Laptop » Sat Mar 31, 2018 5:12 pm

smitcat wrote:
Sat Mar 31, 2018 4:59 pm
Q's Laptop wrote:
Sat Mar 31, 2018 2:43 pm
smitcat wrote:
Sat Mar 31, 2018 2:02 pm
Perhaps read a couple dozen of these....

https://www.consumeraffairs.com/finance ... jones.html
Sounds like some of those people wouldn't know how to turn on a lamp.
https://www.bloomberg.com/gadfly/articl ... sting-fees
Wot about it? I left Edward Jones for the reasons given in the article. They are charging way too much in fees.

Still, some of the people in your linked article from consumeraffairs.com are as dumb as cottage cheese.

smitcat
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Re: Edward Jones

Post by smitcat » Sat Mar 31, 2018 5:18 pm

Q's Laptop wrote:
Sat Mar 31, 2018 5:12 pm
smitcat wrote:
Sat Mar 31, 2018 4:59 pm
Q's Laptop wrote:
Sat Mar 31, 2018 2:43 pm
smitcat wrote:
Sat Mar 31, 2018 2:02 pm
Perhaps read a couple dozen of these....

https://www.consumeraffairs.com/finance ... jones.html
Sounds like some of those people wouldn't know how to turn on a lamp.
https://www.bloomberg.com/gadfly/articl ... sting-fees
Wot about it? I left Edward Jones for the reasons given in the article. They are charging way too much in fees.

Still, some of the people in your linked article from consumeraffairs.com are as dumb as cottage cheese.
https://www.fool.com/investing/general/ ... y-ser.aspx

macheta
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Re: Edward Jones

Post by macheta » Sat Mar 31, 2018 6:00 pm

If you leave how will the ej adviser make his BMW payment?

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Q's Laptop
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Re: Edward Jones

Post by Q's Laptop » Sat Mar 31, 2018 6:13 pm

smitcat wrote:
Sat Mar 31, 2018 5:18 pm
Q's Laptop wrote:
Sat Mar 31, 2018 5:12 pm
smitcat wrote:
Sat Mar 31, 2018 4:59 pm
Q's Laptop wrote:
Sat Mar 31, 2018 2:43 pm
smitcat wrote:
Sat Mar 31, 2018 2:02 pm
Perhaps read a couple dozen of these....

https://www.consumeraffairs.com/finance ... jones.html
Sounds like some of those people wouldn't know how to turn on a lamp.
https://www.bloomberg.com/gadfly/articl ... sting-fees
Wot about it? I left Edward Jones for the reasons given in the article. They are charging way too much in fees.

Still, some of the people in your linked article from consumeraffairs.com are as dumb as cottage cheese.
https://www.fool.com/investing/general/ ... y-ser.aspx
Preaching to the choir. Edward Jones can charge high fees, churn your account, and give you lousy advice.

That said, I did make some nice returns at EJ with American Funds and a couple of Franklin Funds. Several beat the index, something Bogleheads will get all twisty over, I'm sure.

macreel
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Re: Edward Jones

Post by macreel » Thu Apr 05, 2018 7:48 am

we talking a year? 5 or 10? how consistent were these funds?

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Rob5TCP
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Re: Edward Jones

Post by Rob5TCP » Thu Apr 05, 2018 8:08 am

Great story on the history of Edward Jones --

https://kronstantinople.blogspot.com/p/ ... -saga.html

They started out quite idealistically. Not anymore.

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William4u
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Re: Edward Jones

Post by William4u » Thu Apr 05, 2018 9:27 am

Rob5TCP wrote:
Thu Apr 05, 2018 8:08 am
Great story on the history of Edward Jones --

https://kronstantinople.blogspot.com/p/ ... -saga.html

They started out quite idealistically. Not anymore.
Potential clients should read this before they invest with EJ. It is a bit long, but there are some eye opening parts that people should know about.

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ruralavalon
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Re: Edward Jones

Post by ruralavalon » Thu Apr 05, 2018 9:56 am

Rob5TCP wrote:
Thu Apr 05, 2018 8:08 am
Great story on the history of Edward Jones --

https://kronstantinople.blogspot.com/p/ ... -saga.html

They started out quite idealistically. Not anymore.
The article is very long, but quite interesting.

Thanks for posting the link.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

WhyAmeriprise
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Re: Edward Jones

Post by WhyAmeriprise » Thu Apr 05, 2018 12:04 pm

twhite5262 wrote:
Sat Mar 31, 2018 7:55 am
I have taxable American funds with EJ that have ER about .6 of which they get 25% of that fee. Have not seen trading fees when TLH . They do offer more managed service for about 1.2% but I don't subscribe. Still get to converse with my local advisor. Other 50% of my portfolio in tax deferred in Vanguard Target fund .
.6% ER is already too high. Please, keep reading that prospectus. I recently met a colleague who did not realize that there were front-loaded sales charges to the tune of 5.75% on American Funds. https://www.americanfunds.com/individua ... arges.html

Fidelity and Vanguard target funds are very good. I love it how Vanguard shows the composition of their Target funds, so I was able to use the same percentages when I bought the individual ETF at Merrill Edge on my own.

CurlyDave
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Re: Edward Jones

Post by CurlyDave » Thu Apr 05, 2018 6:09 pm

macheta wrote:
Sat Mar 31, 2018 6:00 pm
If you leave how will the ej adviser make his BMW payment?
I think you should help send his kids to community college instead of an expensive private one.

* * * * * * * * * * * * * *

Realistically speaking through, another month or two of EJ fees is not going to be a disaster. Take some time and move to another brokerage with deliberate speed.

But, don't let them fleece you for another calendar quarter.

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