Another Edward Jones and other Financial Advisor "Lessons to Share"

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Sandtrap
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Another Edward Jones and other Financial Advisor "Lessons to Share"

Post by Sandtrap » Sun Mar 01, 2020 12:46 pm

One investment scenario and story to learn from.

A friend is recently early retired.
Has a 1 million portfolio at Edward Jones.
Devoted and loyal to the Financial Advisor who has created a portfolio so complex that my friend is "glad" that he is taking care of his lifetime earnings.
My friend knows that I am a lifetime business and investment finance fan but assures me that he doesn't understand what the financial advisor does, and even I would not be able to understand his investment portfolio because it is so complex. (no comment)
In fact:
Friend says, "The friendly Edward Jones financial advisor recently assured me that he had made $50,000 over the past 12 months.
My friend is impressed by this.
I'm not sure if this 5% return is gross portfolio returns/income or net income or paper portfolio value increase.

Lesson: tread carefully in the world of investment finance where everyone is your "friend".

Actionable Question:
Has this happened to you in some shape or form?
What did you do about it?
How could others benefit from what you learned from your experience with a "wealth manager" "financial advisor"?

*The point of this post is to also emphasis the importance of this:
Investing Behavior Pitfalls
https://www.bogleheads.org/wiki/Behavioral_pitfalls


j :happy
Last edited by Sandtrap on Mon Mar 02, 2020 9:59 am, edited 4 times in total.
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Dottie57
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Re: Another Edward Jones and Financial Advisor Lesson

Post by Dottie57 » Sun Mar 01, 2020 1:21 pm

Around 2006 I went to a Wealth Management company who had helped friends of my parents. Introductory meeting was to discuss what I wanted : low cost funds, diversity. Help in deciding asset allocation. Advisor said he could help. Wrote out a check for a plan. Came back and the plan was not what we had talked about at all! He wanted all of my money in their own proprietary funds! I really blasted him (for me) and walked out the door never to return. Learned that this wealth advisor was out to collect high priced fees for himself and his company.

I kept looking for help in investing until I found Bogleheads. The saving grace in my investing days was an excellent 401k at employer with Vanguard U.S. index funds and other low cost funds. In essence the 401k led me to a Boglehead way of investing.

The real lesson: no one cares about your money as much as you do. Believe that you can handle your money yourself. It is a bit of math. To be successful you need to save and invest on a regular basis. Do it with index funds.

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Re: Another Edward Jones and Financial Advisor Lesson

Post by Sandtrap » Sun Mar 01, 2020 1:58 pm

Dottie57 wrote:
Sun Mar 01, 2020 1:21 pm
Around 2006 I went to a Wealth Management company who had helped friends of my parents. Introductory meeting was to discuss what I wanted : low cost funds, diversity. Help in deciding asset allocation. Advisor said he could help. Wrote out a check for a plan. Came back and the plan was not what we had talked about at all! He wanted all of my money in their own proprietary funds! I really blasted him (for me) and walked out the door never to return. Learned that this wealth advisor was out to collect high priced fees for himself and his company.

I kept looking for help in investing until I found Bogleheads. The saving grace in my investing days was an excellent 401k at employer with Vanguard U.S. index funds and other low cost funds. In essence the 401k led me to a Boglehead way of investing.

The real lesson: no one cares about your money as much as you do. Believe that you can handle your money yourself. It is a bit of math. To be successful you need to save and invest on a regular basis. Do it with index funds.
Perfect!
j :happy
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Re: Another Edward Jones and Financial Advisor Lesson

Post by ionball » Sun Mar 01, 2020 2:06 pm

I have several relatives doing as your friend. I try to inform them of the pitfalls, but I'm not very successful with my low key persuasion. My relatives are getting by, but they don't travel nearly as much as I do. Dottie57 is spot on!

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Re: Another Edward Jones and Financial Advisor Lesson

Post by keepingitsimple » Sun Mar 01, 2020 2:17 pm

Sandtrap wrote:
Sun Mar 01, 2020 12:46 pm
How could others benefit from what you learned from your experience with a "wealth manager" "financial advisor"?
My takeaways from dealing with a financial advisor:

-Do not confuse friendly with friend.
-If you think your financial advisor is your friend, you are mistaken. They are not.
-If your financial advisor really is your friend, then they shouldn't be your advisor.
-When repeating advice from ones "wealth manager" or "financial advisor" (in your head or to someone else), replace those terms with "sales person" and see if the advice feels the same.
-If you don't understand it, don't buy it.
-If your advisor makes this comment in a derogatory way, it's time to part ways: "It seems like it's all about the money with you."

I'm still a little salty from a previous dealing with an advisor :happy

Edit: Dottie57's post brought to mind another lesson:
-If your advisor is trying to sell you a "proprietary fund" not available elsewhere, there is likely a reason...and the reason is not good.

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Re: Another Edward Jones and Financial Advisor Lesson

Post by Lalamimi » Sun Mar 01, 2020 2:23 pm

We were with EJ advisor for over 20 years. The dad retired, son took over. Did not really pay attention "all is good". Finally retired 2018 and paid attention and found this group. Questions "advisor" about fees. He told me the EJ ones, but failed to mention all the high fees in the over 25 funds were in. Moved our just over $1M to Fidelity this Fall. Minute he found out, shut us down. Would not return calls. His assistant thank goodness was helpful.
I am still selling off the funds aiming for the 3 Fund portfolio. Hope your friend sees the light.

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Re: Another Edward Jones and Financial Advisor Lesson

Post by Rus In Urbe » Sun Mar 01, 2020 2:29 pm

It's such a no-win situation, to talk to relatives or friends about investing. The least sophisticated ones want "a guy" to do it for them. :annoyed

Complicating our situation is that we practice "stealth wealth." No one around us would probably guess at our net worth because we have one car (good old Subaru), one modest house with garden that we love, and we practice frugality because it is environmentally sound and spiritually enriching to limit expenditure. We have a donor advised fund and we give a lot to charity, often anonymously.

Given our lifestyle, friends and relatives assume we have very modest means (though they might marvel at our travels!).

So who would possibly take seriously investment advice from someone who looks so modestly endowed, so financially middle-class?

It's okay with us. The most we do nowadays is, when asked, to send good investment books for them to read----either they figure it out on their own and make changes, or they don't.

And it makes the conversations with other Bogleheads all the more enjoyable.... :sharebeer
I'd like to live as a poor man with lots of money. ~Pablo Picasso

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Re: Another Edward Jones and Financial Advisor Lesson

Post by Rick Ferri » Sun Mar 01, 2020 2:38 pm

It takes about 100 touches before someone bit's at the apple. Every time you say something, it's another touch.

You cannot help someone who isn't ready to be helped, but when they are ready, we'll be here.

:happy

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Re: Another Edward Jones and Financial Advisor Lesson

Post by arcticpineapplecorp. » Sun Mar 01, 2020 2:41 pm

Sandtrap wrote:
Sun Mar 01, 2020 12:46 pm
One investment scenario and story to learn from.

A friend is recently early retired.
Has a 1 million portfolio at Edward Jones.
Devoted and loyal to the Financial Advisor who has created a portfolio so complex that my friend is "glad" that he is taking care of his lifetime earnings.
My friend knows that I am a lifetime business and investment finance fan but assures me that he doesn't understand what the financial advisor does, and even I would not be able to understand his investment portfolio because it is so complex. (no comment)
In fact:
Friend says, "The friendly Edward Jones financial advisor recently assured me that he had made $50,000 over the past 12 months.
My friend is impressed by this.
I'm not sure if this 5% return is gross portfolio returns/income or net income or paper portfolio value increase.

Lesson: tread carefully in the world of investment finance where everyone is your "friend".

Actionable Question:
Has this happened to you in some shape or form?
What did you do about it?
How could others benefit from what you learned from your experience with a "wealth manager" "financial advisor"?

j :happy
Hasn't happened to me, but I think these stories reinforce how important it is to be a critical thinker and skeptical (not cynical, but skeptical as in "question everything").

For example, critically thinking about your story I ask:
1. "Is complex necessarily or always better than simple?"
2. "Was a 5% gain in the past 12 months good or bad?", "compared to what?"
3. "Is investing difficult to understand?"
4. "Do I normally pay my friends?"
5. "How much am I paying this friend each year?" (the answer at 1% alone AUM is $10,000 a year. Next question, "Is it worth paying him $10,000 a year?"

So on and so forth. I suppose you have to know some things before you can know what questions to ask, but I think many assumptions are made (investing is hard, i don't know how much i pay but whatever it is it's worth it, etc.)
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

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Re: Another Edward Jones and Financial Advisor Lesson

Post by Buford T Justice » Sun Mar 01, 2020 3:11 pm

I have a sibling paying about $13k to EJ. She hopes I am doing ok (investing) on my own and has offered to introduce me to her guy... She raves about his taking her and B-I-L to the nicest restaurant in town twice a year. I simply ask who do you think is paying for dinner?


I also refer to her EJ guy as "Mr. Twenty Percent" … as in if the market goes up 7% and he gets 1.4% he gets 20% of her gain.... not bad with no skin in the game.

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Re: Another Edward Jones and Financial Advisor Lesson

Post by Rick Ferri » Sun Mar 01, 2020 3:18 pm

Investment Jeopardy!

A FOUR LETTER WORD THAT BROKERS HATE TALKING ABOUT

Duh, duh, dah, dah, duh, duh, ding!

WHAT ARE FEES?

:beer
The Education of an Index Investor: born in darkness, finds indexing enlightenment, overcomplicates everything, embraces simplicity.

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Re: Another Edward Jones and Financial Advisor Lesson

Post by shess » Sun Mar 01, 2020 3:25 pm

Rus In Urbe wrote:
Sun Mar 01, 2020 2:29 pm
So who would possibly take seriously investment advice from someone who looks so modestly endowed, so financially middle-class?
Would you rather take financial advice from a person in an expensive suit in a meeting room with marble counters and rich dark carpet, paintings on the wall, behind a very attractive and well-dressed receptionist, who offers you a selection from a large variety of beverages while you wait for the Very Busy Advisor to Get Right With You after they finish with their Important Work? Or a guy who's office has ratty carpet, second-hand desks, in an industrial park, with no receptionist?

Well, I choose neither, but people are dumb this way.

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Re: Another Edward Jones and Financial Advisor Lesson

Post by Sandtrap » Sun Mar 01, 2020 3:27 pm

Another neighbor friend:

Financial Advisor Wealth Manager flies in and visits my neighbor friend.

FA Rents a Ferrari because he knows my friend is a sucker for sports cars (owns a Porche).

FA takes my friend for a drive in the rented Ferarri and treats him and his DW to an expensive dinner.

Neighbor Friend happily invests more of his retirement savings.

Go figure. . . . :confused

j :happy
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Re: Another Edward Jones and Financial Advisor Lesson

Post by Sandtrap » Sun Mar 01, 2020 3:27 pm

Rick Ferri wrote:
Sun Mar 01, 2020 3:18 pm
Investment Jeopardy!

A FOUR LETTER WORD THAT BROKERS HATE TALKING ABOUT

Duh, duh, dah, dah, duh, duh, ding!

WHAT ARE FEES?

:beer
Priceless!

Thanks Rick.
jim :happy
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Re: Another Edward Jones and other Financial Advisor Lessons

Post by Rosencrantz1 » Sun Mar 01, 2020 4:54 pm

I have a very good friend who's portfolio is very close to 10M. He steadfastly insists on staying with EJ. I've tried, over the years, to nudge him towards the Boglehead way of investing. I've told him about this site and encouraged him to just spend some time reading over some of the posts - or, better yet, reading some of the wikis associated with the site. I can't seem to get him interested. Oh well.... I'm reminded of "you can lead a horse to water..."

In my friends defense, he clearly has enough assets (and pension income) to buy his broker the occasional new boat (and, I think he's much more interested in golf than anything in the markets) :happy

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Re: Another Edward Jones and other Financial Advisor Lessons

Post by Mr.BB » Sun Mar 01, 2020 5:03 pm

My simple rule when I deal with anybody is if they can answer
How and Why. Ask any FA to explain their investments choices with those two questions in mind and most of them wouldn't be able to honestly answer.
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."

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Re: Another Edward Jones and Financial Advisor Lesson

Post by Stinky » Sun Mar 01, 2020 5:11 pm

Lalamimi wrote:
Sun Mar 01, 2020 2:23 pm
We were with EJ advisor for over 20 years. The dad retired, son took over. Did not really pay attention "all is good". Finally retired 2018 and paid attention and found this group. Questions "advisor" about fees. He told me the EJ ones, but failed to mention all the high fees in the over 25 funds were in. Moved our just over $1M to Fidelity this Fall. Minute he found out, shut us down. Would not return calls. His assistant thank goodness was helpful.
I am still selling off the funds aiming for the 3 Fund portfolio. Hope your friend sees the light.
Glad that you found this group.

Sorry that you were taken advantage of for 20 years.
It's a GREAT day to be alive - Travis Tritt

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Re: Another Edward Jones and other Financial Advisor Lessons

Post by Pu239 » Sun Mar 01, 2020 6:02 pm

As luck would have it, an EJ rep stopped by the house yesterday to check if we and other neighbors were panicking over the recent market drop. She offered their services to help calm any fears we might be having. Such a thoughtful person! Fortunately we already have the best financial advisors (Bogle, Bernstein, Quinn, Swedroe, Tobias, etc.) so she left satisfied that we were in good hands and not subject to making any rash decisions. :shock:
Between the idea And the reality...Between the motion And the act...Falls the Shadow - T. S. Eliot

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Re: Another Edward Jones and other Financial Advisor Lessons

Post by BlackStrat » Sun Mar 01, 2020 6:48 pm

Rosencrantz1 wrote:
Sun Mar 01, 2020 4:54 pm
I think he's much more interested in golf than anything in the markets :happy
Tell him that matching index performance in our investments (via an index fund and without advisor fees) is like shooting par in golf; the majority of weekend golfers would be really happy to do so.

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Re: Another Edward Jones and other Financial Advisor Lessons

Post by prairieman » Sun Mar 01, 2020 7:03 pm

After my father-in-law passed away, my mother and law asked me to help sort things out. Her husband had handled everything. She had an impossibly complicated portfolio with Edward Jones, US Bank, and Fidelity. My advice was to consolidate and simplify.
I told her what I do (BogleHead like) and she totally ignored me.

Several years later she got sick and eventually passed away, leaving a terrible mess for my wife and I to clean up, as executors. Ironically, the investments hadn’t done terribly. But we sold almost all of them and reinvested our inheritance in a simplified manner.
It occurred to me later that she could not have simplified her account like we did because the tax consequences would have been terrible. I had given her bad advice and we were lucky she ignored it. She was trapped at EJ because it would have been too costly to switch.

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Re: Another Edward Jones and other Financial Advisor Lessons

Post by Sandtrap » Sun Mar 01, 2020 8:20 pm

Rosencrantz1 wrote:
Sun Mar 01, 2020 4:54 pm
I have a very good friend who's portfolio is very close to 10M. He steadfastly insists on staying with EJ. I've tried, over the years, to nudge him towards the Boglehead way of investing. I've told him about this site and encouraged him to just spend some time reading over some of the posts - or, better yet, reading some of the wikis associated with the site. I can't seem to get him interested. Oh well.... I'm reminded of "you can lead a horse to water..."

In my friends defense, he clearly has enough assets (and pension income) to buy his broker the occasional new boat (and, I think he's much more interested in golf than anything in the markets) :happy
I know a number of folks like this and have pondered on their reasons.
1
It's great to brag about having a financial advisor take care of the dirty business of handling your money.
2
They have so much that delegating everything, from the yard worker to the housekeeper to the . . . . is empowering (huge ego).
3
They absolutely have bought into the whole "financial advisor/wealth manager" scenario, swallowed the whole Enchilada, hook, line, sinker, boat, and dock. (met many like this)
4
Ignorant and uninformed and blindly biased. (amazing that some, like many doctors, are brilliant at earning and making money in their fields but blind elsewhere.

I also know many folks who have made millions in a lifetime and now have very little in their senior years. Interesting.

I no longer go any farther than to maybe, just maybe, mention my background in finance and business. Like you say, that horse to water thingy.

The creation and retention of wealth has always fascinated me since I was very little. How lives are shaped.

j :happy
Wiki Bogleheads Wiki: Everything You Need to Know

JLJL
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Re: Another Edward Jones and other Financial Advisor Lessons

Post by JLJL » Sun Mar 01, 2020 8:41 pm

Sandtrap wrote:
Sun Mar 01, 2020 8:20 pm
Rosencrantz1 wrote:
Sun Mar 01, 2020 4:54 pm
I have a very good friend who's portfolio is very close to 10M. He steadfastly insists on staying with EJ. I've tried, over the years, to nudge him towards the Boglehead way of investing. I've told him about this site and encouraged him to just spend some time reading over some of the posts - or, better yet, reading some of the wikis associated with the site. I can't seem to get him interested. Oh well.... I'm reminded of "you can lead a horse to water..."

In my friends defense, he clearly has enough assets (and pension income) to buy his broker the occasional new boat (and, I think he's much more interested in golf than anything in the markets) :happy
I know a number of folks like this and have pondered on their reasons.
1
It's great to brag about having a financial advisor take care of the dirty business of handling your money.
2
They have so much that delegating everything, from the yard worker to the housekeeper to the . . . . is empowering (huge ego).
3
They absolutely have bought into the whole "financial advisor/wealth manager" scenario, swallowed the whole Enchilada, hook, line, sinker, boat, and dock. (met many like this)
4
Ignorant and uninformed and blindly biased. (amazing that some, like many doctors, are brilliant at earning and making money in their fields but blind elsewhere.

I also know many folks who have made millions in a lifetime and now have very little in their senior years. Interesting.

I no longer go any farther than to maybe, just maybe, mention my background in finance and business. Like you say, that horse to water thingy.

The creation and retention of wealth has always fascinated me since I was very little. How lives are shaped.

j :happy
I really agree that it’s a status symbol or ego stroke to “have a guy” cause “we make good money” and yes, it’s often a ‘friend of a friend’ who is now a ‘friend’.
Rick Ferri wrote:
Sun Mar 01, 2020 3:18 pm
Investment Jeopardy!

A FOUR LETTER WORD THAT BROKERS HATE TALKING ABOUT

Duh, duh, dah, dah, duh, duh, ding!

WHAT ARE FEES?

:beer
,

Coincidentally wasn’t it a free book of yoursRick Ferri, that annihilates the finance industry? I remember reading one from you years ago and forever emblazoned the myriad fees and traps these guys levy. Great gift to the world... :sharebeer

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Re: Another Edward Jones and other Financial Advisor Lessons

Post by Rick Ferri » Sun Mar 01, 2020 8:54 pm

Here is my free book from 1999. Not much has changed.

Serious Money: Straight talk about investing for retirement.

Rick Ferri
The Education of an Index Investor: born in darkness, finds indexing enlightenment, overcomplicates everything, embraces simplicity.

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Re: Another Edward Jones and other Financial Advisor Lessons

Post by BolderBoy » Sun Mar 01, 2020 9:05 pm

Sandtrap wrote:
Sun Mar 01, 2020 12:46 pm
Has this happened to you in some shape or form?
What did you do about it?
Throughout the 2000s I consulted 4 different FAs, none of them associated with any mainstream FA house.

FA #1 created a complicated portfolio I couldn't begin to understand. I fired him after 2 years of crummy performance (and large fees). He didn't whimper much.

FA #2 promised he could beat FA #1, took my $$$ and created a complicated portfolio I couldn't begin to understand. He did worse than FA #1 and I fired him after 3 years of crummy performance (and large fees). He screamed bloody murder for weeks.

FA #3 promised she could beat FA #s 1 & 2, suggested a complicated portfolio I couldn't begin to understand with associated high fees. I decided not to go with her and floundered around on my own for a couple of years with my portfolio going sideways. Backtesting FA #3's portfolio, it didn't beat either of the previous FAs' performance.

FA #4 was the Silver Tongued Devil incarnate. He made the biggest promises (and charged the highest fees). I gave him 90% of my $$$. The other 10% I held back to invest myself. I fired him after 3 years and his rendition of my portfolio (so complicated I bet even he didn't understand it) had lost 40%. During the same period of time, the 10% that I was investing myself gained 40%. He almost cried when I gave him the boot. Took two full months to get untangled from him.

Then I found the BHs and have lived in investing bliss ever since. :happy
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Re: Another Edward Jones and other Financial Advisor Lessons

Post by Rosencrantz1 » Sun Mar 01, 2020 9:12 pm

Sandtrap wrote:
Sun Mar 01, 2020 8:20 pm
Rosencrantz1 wrote:
Sun Mar 01, 2020 4:54 pm
I have a very good friend who's portfolio is very close to 10M. He steadfastly insists on staying with EJ. I've tried, over the years, to nudge him towards the Boglehead way of investing. I've told him about this site and encouraged him to just spend some time reading over some of the posts - or, better yet, reading some of the wikis associated with the site. I can't seem to get him interested. Oh well.... I'm reminded of "you can lead a horse to water..."

In my friends defense, he clearly has enough assets (and pension income) to buy his broker the occasional new boat (and, I think he's much more interested in golf than anything in the markets) :happy
I know a number of folks like this and have pondered on their reasons.
1
It's great to brag about having a financial advisor take care of the dirty business of handling your money.
2
They have so much that delegating everything, from the yard worker to the housekeeper to the . . . . is empowering (huge ego).
3
They absolutely have bought into the whole "financial advisor/wealth manager" scenario, swallowed the whole Enchilada, hook, line, sinker, boat, and dock. (met many like this)
4
Ignorant and uninformed and blindly biased. (amazing that some, like many doctors, are brilliant at earning and making money in their fields but blind elsewhere.

I also know many folks who have made millions in a lifetime and now have very little in their senior years. Interesting.

I no longer go any farther than to maybe, just maybe, mention my background in finance and business. Like you say, that horse to water thingy.

The creation and retention of wealth has always fascinated me since I was very little. How lives are shaped.

j :happy
In fairness to my friend, this is not him (huge ego). He does all his own home/lawn maintenance (and, the lawn is substantial). What I find especially interesting is that I believe he STRONGLY believes the $$ spent at EJ is money well spent. And, as I think about it, it may very well be for him - He owns a very balanced portfolio and (left to his own devices) he might over react to market turbulence... I don't know... he's a smart guy... I've always been puzzled by his willingness to continue his relationship with EJ. I'm the kind of guy that's VERY conscious of costs - maybe my friend views investment 'cost' (AUM fees etc) as the price of doing business?

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Re: Another Edward Jones and other Financial Advisor Lessons

Post by ThereAreNoGurus » Sun Mar 01, 2020 9:35 pm

Rick Ferri wrote:
Sun Mar 01, 2020 8:54 pm
Here is my free book from 1999. Not much has changed.

Serious Money: Straight talk about investing for retirement.

Rick Ferri
I could find nothing on that page one can click to get a free download.
Trade the news and you will lose.


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Re: Another Edward Jones and other Financial Advisor Lessons

Post by ARoseByAnyOtherName » Sun Mar 01, 2020 9:49 pm

Rosencrantz1 wrote:
Sun Mar 01, 2020 9:12 pm
In fairness to my friend, this is not him (huge ego). He does all his own home/lawn maintenance (and, the lawn is substantial). What I find especially interesting is that I believe he STRONGLY believes the $$ spent at EJ is money well spent. And, as I think about it, it may very well be for him - He owns a very balanced portfolio and (left to his own devices) he might over react to market turbulence... I don't know... he's a smart guy... I've always been puzzled by his willingness to continue his relationship with EJ. I'm the kind of guy that's VERY conscious of costs - maybe my friend views investment 'cost' (AUM fees etc) as the price of doing business?
I think part of it is what people choose to deal with in life. Some people have no problem changing the timing belt on a high-mileage Honda but don’t want to deal with investing. Maybe they dont think they’re smart enough, maybe they’re just not interested. I don’t know.

Meanwhile there are other people (like me) who would never think about changing a busted water valve in their own, but also would never ina million years have anyone else manage their money. Different choices.

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Re: Another Edward Jones and other Financial Advisor Lessons

Post by Sandtrap » Sun Mar 01, 2020 9:56 pm

Rosencrantz1 wrote:
Sun Mar 01, 2020 9:12 pm
Sandtrap wrote:
Sun Mar 01, 2020 8:20 pm
Rosencrantz1 wrote:
Sun Mar 01, 2020 4:54 pm
I have a very good friend who's portfolio is very close to 10M. He steadfastly insists on staying with EJ. I've tried, over the years, to nudge him towards the Boglehead way of investing. I've told him about this site and encouraged him to just spend some time reading over some of the posts - or, better yet, reading some of the wikis associated with the site. I can't seem to get him interested. Oh well.... I'm reminded of "you can lead a horse to water..."

In my friends defense, he clearly has enough assets (and pension income) to buy his broker the occasional new boat (and, I think he's much more interested in golf than anything in the markets) :happy
I know a number of folks like this and have pondered on their reasons.
1
It's great to brag about having a financial advisor take care of the dirty business of handling your money.
2
They have so much that delegating everything, from the yard worker to the housekeeper to the . . . . is empowering (huge ego).
3
They absolutely have bought into the whole "financial advisor/wealth manager" scenario, swallowed the whole Enchilada, hook, line, sinker, boat, and dock. (met many like this)
4
Ignorant and uninformed and blindly biased. (amazing that some, like many doctors, are brilliant at earning and making money in their fields but blind elsewhere.

I also know many folks who have made millions in a lifetime and now have very little in their senior years. Interesting.

I no longer go any farther than to maybe, just maybe, mention my background in finance and business. Like you say, that horse to water thingy.

The creation and retention of wealth has always fascinated me since I was very little. How lives are shaped.

j :happy
In fairness to my friend, this is not him (huge ego). He does all his own home/lawn maintenance (and, the lawn is substantial). What I find especially interesting is that I believe he STRONGLY believes the $$ spent at EJ is money well spent. And, as I think about it, it may very well be for him - He owns a very balanced portfolio and (left to his own devices) he might over react to market turbulence... I don't know... he's a smart guy... I've always been puzzled by his willingness to continue his relationship with EJ. I'm the kind of guy that's VERY conscious of costs - maybe my friend views investment 'cost' (AUM fees etc) as the price of doing business?
+1
Agreed. I have a bunch of friends like that. Hard working. Do everything themselves even though they don't have to. Yet, EJ or other advisors used. I think it's just worth the money/fees to not think about those aspects of life. Well. If it makes folks happy.
j :D
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Re: Another Edward Jones and other Financial Advisor Lessons

Post by avidlearner » Sun Mar 01, 2020 10:01 pm

ThereAreNoGurus wrote:
Sun Mar 01, 2020 9:35 pm
Rick Ferri wrote:
Sun Mar 01, 2020 8:54 pm
Here is my free book from 1999. Not much has changed.

Serious Money: Straight talk about investing for retirement.

Rick Ferri
I could find nothing on that page one can click to get a free download.
The link is just above the book's thumbnail. Here you go https://secureservercdn.net/104.238.71. ... t-Talk.pdf

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Sandtrap
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Re: Another Edward Jones and other Financial Advisor Lessons

Post by Sandtrap » Sun Mar 01, 2020 10:06 pm

Rick Ferri wrote:
Sun Mar 01, 2020 8:54 pm
Here is my free book from 1999. Not much has changed.

Serious Money: Straight talk about investing for retirement.

Rick Ferri
Thanks Rick!
j :happy
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Re: Another Edward Jones and other Financial Advisor Lessons

Post by AlphaLess » Sun Mar 01, 2020 10:10 pm

I see a lot of people on these forums worrying about their friends.

IMO: waste of time. You can't change people. You can't convince them.

If someone comes for an advice, and they are open to it: different story.
"A Republic, if you can keep it". Benjamin Franklin. 1787. | Party affiliation: Vanguard. Religion: low-cost investing.

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Re: Another Edward Jones and other Financial Advisor Lessons

Post by ThereAreNoGurus » Mon Mar 02, 2020 4:20 am

avidlearner wrote:
Sun Mar 01, 2020 10:01 pm
ThereAreNoGurus wrote:
Sun Mar 01, 2020 9:35 pm
Rick Ferri wrote:
Sun Mar 01, 2020 8:54 pm
Here is my free book from 1999. Not much has changed.

Serious Money: Straight talk about investing for retirement.

Rick Ferri
I could find nothing on that page one can click to get a free download.
The link is just above the book's thumbnail. Here you go https://secureservercdn.net/104.238.71. ... t-Talk.pdf
Wow... don't know how I missed it the first time. Thanks!

Also, thanks mhalley!
You can find it here
https://rickferri.com/wp-content/upload ... t-Talk.pdf
Trade the news and you will lose.

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Re: Another Edward Jones and other Financial Advisor Lessons

Post by Sasquatch1 » Mon Mar 02, 2020 9:10 am

ThereAreNoGurus wrote:
Sun Mar 01, 2020 9:35 pm
Rick Ferri wrote:
Sun Mar 01, 2020 8:54 pm
Here is my free book from 1999. Not much has changed.

Serious Money: Straight talk about investing for retirement.

Rick Ferri
I could find nothing on that page one can click to get a free download.

Hold down/click the title right under free download. It’s basically just a link to the book.

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Re: Another Edward Jones and other Financial Advisor Lessons

Post by Sandtrap » Mon Mar 02, 2020 9:29 am

AlphaLess wrote:
Sun Mar 01, 2020 10:10 pm
I see a lot of people on these forums worrying about their friends.

IMO: waste of time. You can't change people. You can't convince them.

If someone comes for an advice, and they are open to it: different story.
Perhaps "bogleheads" objectively learn from the mistakes of others and their awareness of the larger picture of personal investment finance, and passion for learning and exploring that realm, carries over into all aspects of life.

Sharing these casual observations of; friends, aquaintances, coworkers, relatives, etc, in this line of thinking (after all, people are only exposed to people they are exposed to) as far as their choice of path in financial planning, enriches forum learning for all.

This makes for a post/thread "Actionable Content" per forum guidelines.

True, sometimes there may seem to be a condescending as well as a mentoring tone to the stories, which is good to overlook.

Regardless of esoterics; money, finances, financial plannning, and paths to career and wealth, structure a life and lifestyle.
The two are intertwined and when one is strategized, or laid to waste, the other follows. So, it's always good to keep the biggest picture in mind.

j :D
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Re: Another Edward Jones and other Financial Advisor Lessons

Post by JLJL » Mon Mar 02, 2020 10:26 am

Rick Ferri wrote:
Sun Mar 01, 2020 8:54 pm
Here is my free book from 1999. Not much has changed.

Serious Money: Straight talk about investing for retirement.

Rick Ferri
Thanks again. Can't recommend this strongly enough.

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Re: Another Edward Jones and Financial Advisor Lesson

Post by augryphon » Mon Mar 02, 2020 10:32 am

Buford T Justice wrote:
Sun Mar 01, 2020 3:11 pm
I have a sibling paying about $13k to EJ. She hopes I am doing ok (investing) on my own and has offered to introduce me to her guy... She raves about his taking her and B-I-L to the nicest restaurant in town twice a year. I simply ask who do you think is paying for dinner?


I also refer to her EJ guy as "Mr. Twenty Percent" … as in if the market goes up 7% and he gets 1.4% he gets 20% of her gain.... not bad with no skin in the game.
and if the market goes down 7%, EJ still gets their 1.4%!

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Re: Another Edward Jones and other Financial Advisor "Lessons to Share"

Post by AB609 » Mon Mar 02, 2020 10:42 am

I think the most you can do is plant the seed. MIL is with EJ and asked me to review her portfolio. I told her I thought she was paying way too much for a portfolio that was too complicated and inappropriate for her situation. I pointed her towards Vanguard PAS or Fidelity but she is very tech averse and will not do anything over the computer ( I offered that that could be overcome if she was willing to take a short trip to a regional Fidelity office). I think she has stayed with them due to momentum and the fact that the portfolio generally increased every year. Maybe with the recent pull back in the market she will have second thoughts.

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Re: Another Edward Jones and other Financial Advisor "Lessons to Share"

Post by bearcub » Mon Mar 02, 2020 10:52 am

My cousin told me a few years ago that she had talk to a friends advisor from Primerica. He was gonna put her in some load high fee funds. Also a high fee variable annuity. She told him forget it + I got her setup with Vanguard. She is thankful + gives me a good Christmas present each year. :D

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Re: Another Edward Jones and other Financial Advisor "Lessons to Share"

Post by B. Wellington » Mon Mar 02, 2020 10:53 am

Sandtrap, my father who is in his 80's has an account with a well known, large banking company (not EJ.) But is also in the mindset of "I really like the gal who takes care of this for me."

I recently had the chance to look at his small holdings, with 14 different funds and an expense ratio (that I could account for) totaling some 2.14% in annual fees. :shock:

I've tried to have him look into a "simple" lifestyle fund or something similar at Vanguard with little success. I believe his small RMD's will clear the rest of the account very soon. But my trust in FA's "watching out for" elderly clients has reached a new low.

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Re: Another Edward Jones and other Financial Advisor "Lessons to Share"

Post by DesertDiva » Mon Mar 02, 2020 11:15 am

I have acquaintances who joined a financial business several years ago. They are posting on social media how a colleague's wealthy client lost over $1M due to recent market activity. The colleague claims to have helped the client by taking "what's left" and rolling it into his product without tax implications, where it will now be safe from market loss and continue to grow at 6%.

My take: the client locked in his losses by selling and will not benefit from potentially greater gains when the market rebounds (plus the colleague made a tidy commission :wink:). I checked the total market fund in my taxable account and while it has taken a hit, it has also gained over 25% since I've owned it. I won't trade the illusion of safety for long-term growth.

My conclusion: look at the big picture and don't focus on short-term experiences.

#StayingTheCourse

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Re: Another Edward Jones and other Financial Advisor "Lessons to Share"

Post by Stinky » Mon Mar 02, 2020 11:22 am

DesertDiva wrote:
Mon Mar 02, 2020 11:15 am
I have acquaintances who joined a financial business several years ago. They are posting on social media how a colleague's wealthy client lost over $1M due to recent market activity. The colleague claims to have helped the client by taking "what's left" and rolling it into his product without tax implications, where it will now be safe from market loss and continue to grow at 6%.
Sounds like he bought a variable annuity.

:oops:
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Re: Another Edward Jones and other Financial Advisor "Lessons to Share"

Post by Doom&Gloom » Mon Mar 02, 2020 12:07 pm

AB609 wrote:
Mon Mar 02, 2020 10:42 am
I think the most you can do is plant the seed. MIL is with EJ and asked me to review her portfolio. I told her I thought she was paying way too much for a portfolio that was too complicated and inappropriate for her situation. I pointed her towards Vanguard PAS or Fidelity but she is very tech averse and will not do anything over the computer ( I offered that that could be overcome if she was willing to take a short trip to a regional Fidelity office). I think she has stayed with them due to momentum and the fact that the portfolio generally increased every year. Maybe with the recent pull back in the market she will have second thoughts.
Yes. Inertia can be a powerful force. And, for some people, as long as their portfolio grows, there can be an inclination to ignore under-performance or dismiss it with "I'm just not as lucky as most people."

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Re: Another Edward Jones and other Financial Advisor "Lessons to Share"

Post by Sandtrap » Mon Mar 02, 2020 1:24 pm

B. Wellington wrote:
Mon Mar 02, 2020 10:53 am
Sandtrap, my father who is in his 80's has an account with a well known, large banking company (not EJ.) But is also in the mindset of "I really like the gal who takes care of this for me."

I recently had the chance to look at his small holdings, with 14 different funds and an expense ratio (that I could account for) totaling some 2.14% in annual fees. :shock:

I've tried to have him look into a "simple" lifestyle fund or something similar at Vanguard with little success. I believe his small RMD's will clear the rest of the account very soon. But my trust in FA's "watching out for" elderly clients has reached a new low.
+1
Unfortunately true and a growing problem amongst aging Baby Boomers and more.

My long passed mom had a fortune invested with kind and gentle and caring "Mr. Eberliz" (name change) at Merril Lynch, for decades. She took me to meet him once. He looked like "Mr. Rodgers" (wonderful day in the neighborhood) now played in a recent movie by Tom Hanks. I had a degree in business/finance and had worked in the field for a bit when young but still said nothing, why bother. She's happy.

As stated in an earlier post, as informed "bogleheads", it's nice to at least take a half step to pull back the Wizard Of Oz curtain and plant a seed for folks as we are able. It costs nothing but our own good will.

j :happy
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Re: Another Edward Jones and other Financial Advisor "Lessons to Share"

Post by Sandtrap » Mon Mar 02, 2020 1:27 pm

Stinky wrote:
Mon Mar 02, 2020 11:22 am
DesertDiva wrote:
Mon Mar 02, 2020 11:15 am
I have acquaintances who joined a financial business several years ago. They are posting on social media how a colleague's wealthy client lost over $1M due to recent market activity. The colleague claims to have helped the client by taking "what's left" and rolling it into his product without tax implications, where it will now be safe from market loss and continue to grow at 6%.
Sounds like he bought a variable annuity.

:oops:
Is there such a thing as a "deferred variable annuity"??

A friend of mine at Edward Jones was sold a deferred annuity (big one) that he said the "trusted advisor" guaranteed him returns of 5% for life. We know that much of that is a return on principal so the 5% quote is illusory because many think it's interest/dividend return on their dollars.

Your thoughts?

j :happy
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Re: Another Edward Jones and other Financial Advisor "Lessons to Share"

Post by Stinky » Mon Mar 02, 2020 2:43 pm

Sandtrap wrote:
Mon Mar 02, 2020 1:27 pm
Stinky wrote:
Mon Mar 02, 2020 11:22 am
DesertDiva wrote:
Mon Mar 02, 2020 11:15 am
I have acquaintances who joined a financial business several years ago. They are posting on social media how a colleague's wealthy client lost over $1M due to recent market activity. The colleague claims to have helped the client by taking "what's left" and rolling it into his product without tax implications, where it will now be safe from market loss and continue to grow at 6%.
Sounds like he bought a variable annuity.

:oops:
Is there such a thing as a "deferred variable annuity"??

A friend of mine at Edward Jones was sold a deferred annuity (big one) that he said the "trusted advisor" guaranteed him returns of 5% for life. We know that much of that is a return on principal so the 5% quote is illusory because many think it's interest/dividend return on their dollars.

Your thoughts?

j :happy
The term “deferred” indicates that the payments from the annuity contract begin at some date in the future. So, yes, a variable annuity is actually a “deferred variable annuity”. Same thing for an indexed annuity, which is a “deferred indexed annuity”. Dropping the word “deferred” makes the name a little shorter.

Contrast that with an “immediate” annuity, where the payments from the annuity contract begin immediately (or close to it).

Note that many “deferred” annuities are surrendered before annuity payments start. Relatively few “deferred” annuities actually make regular periodic payments from the contract, because they are surrendered first.

Hope that helps.
It's a GREAT day to be alive - Travis Tritt

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Re: Another Edward Jones and other Financial Advisor "Lessons to Share"

Post by Artful Dodger » Mon Mar 02, 2020 3:50 pm

I posted this back in 2018 in response to some questions about Fisher Investments. In comparison to many of the posts above, their approach was simple - they bought individual stocks, so I was paying a 1.25% to 1.5% AUM fee plus a low cost stock trade fee. I didn't have to deal with all the proprietary funds, or mix of other mutual funds with various loads, 12b-1 fees, etc. They simply just under-performed compared to a simple 3 fund portfolio.

_______________________________________________________________

I'll be happy to share my experience with Fisher.

We were with them 3 1/2 to 4 years from shortly after the last meltdown in 08/09 to early 2013. Previous to that I had bought stocks / mutual funds and actively "managed" them. I was looking to simplify and focus on my business. Their sales pitch was they could beat the indexes, and had done so in the past. I believe that they believe their spiel. They had regular investor gatherings close to where we lived, and spent a lot of time explaining how they were investing our money. They did a top down analysis starting with different industry groups and world sectors, then drilled down to the individual stocks in those categories that they thought would out perform. Spared no expense in feeding us and educating us on their outlook. Sometimes, they would have a video feed of Ken Fisher, and he would take questions from the audience. Just so you know, they buy individual stocks, and at the time I was with them, they compared their returns to the MSCI World index. At no time, did they ever talk about asset allocation. I also found out, they pretty much put everyone in the same stocks, so it was almost like being part of a mutual fund. I had around $800k at the time, and I think my AUM fee was 1.5%.

Late 2012, I started doing more investment reading, and it included a small book by Jack Bogle about index investing, and the historical proof of a simple index approach vs active management. I then started to wonder if I was really getting the best results from Fisher. I looked at their results vs the MSCI index, and while there were some up years, in the most recent, they trailed the index by almost 10 points. Add their performance variance to their AUM fees, and I calculated over the time I was with them, I would have been $90k ahead, had I put my money into the US market and International market index funds that I read about in Bogles book. Add in a few idiosyncrasies - (my ROTH which was a hodgepodge of stocks plus a high income fund, outperformed them, and they sold all my Apple stock when I moved to them, then bought it back after it had gone up 150%), and I thought it was time to move. But, by far, the most compelling reason was I would have been so much farther ahead had I simply followed the advice in Bogles book on index investing.

I had to call my Fisher guy, and he spent more time than what was reasonable telling me what a mistake I was making.

I had a long term relationship with Fidelity, and they set up the transfer from Fisher's administrator, to them. I set an asset allocation and moved almost all funds to low cost Fidelity index funds, and some to their managed bond fund. It was the best decision I've made regarding investments. A few years later, I found this board, and it has been a great resource.

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Re: Another Edward Jones and other Financial Advisor Lessons

Post by CedarWaxWing » Mon Mar 02, 2020 7:05 pm

Rick Ferri wrote:
Sun Mar 01, 2020 8:54 pm
Here is my free book from 1999. Not much has changed.

Serious Money: Straight talk about investing for retirement.

Rick Ferri
Thanks Rick...
I enjoyed reading your book on asset allocation a few short years ago.
(And also enjoyed one by Bill Bernstein on asset allocation... And readings from J. Bogle. )

I am a bit thick headed... and tend to look for more than one source in regards to things I am not already an expert on. (Most anything... )
:)

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Re: Another Edward Jones and other Financial Advisor Lessons

Post by CedarWaxWing » Mon Mar 02, 2020 7:34 pm

Mr.BB wrote:
Sun Mar 01, 2020 5:03 pm
My simple rule when I deal with anybody is if they can answer
How and Why. Ask any FA to explain their investments choices with those two questions in mind and most of them wouldn't be able to honestly answer.
I agree with such an approach, but the way many of them (if they were properly indoctrinated by the "company") will respond is that they have this great team of really smart guys and the best computers and software who help them pick the "winners".

In theory that sounds good to the uninitiated general public, even to smart educated people who are not old enough to have been able to read the books written by people who use evidence and facts to support the premises in their books.


It is not intuitive that the simple approach works very well... until you do quite a bit of reading. It was not that long ago that most of the truthful books on personal finance and investing were not yet written.

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Re: Another Edward Jones and other Financial Advisor Lessons

Post by BullMoose » Mon Mar 02, 2020 8:00 pm

prairieman wrote:
Sun Mar 01, 2020 7:03 pm
After my father-in-law passed away, my mother and law asked me to help sort things out. Her husband had handled everything. She had an impossibly complicated portfolio with Edward Jones, US Bank, and Fidelity. My advice was to consolidate and simplify.
I told her what I do (BogleHead like) and she totally ignored me.

Several years later she got sick and eventually passed away, leaving a terrible mess for my wife and I to clean up, as executors. Ironically, the investments hadn’t done terribly. But we sold almost all of them and reinvested our inheritance in a simplified manner.
It occurred to me later that she could not have simplified her account like we did because the tax consequences would have been terrible. I had given her bad advice and we were lucky she ignored it. She was trapped at EJ because it would have been too costly to switch.
:thumbsup Solid self awareness here. Like in all things, context is king.
“It is hard to fail, but it is worse never to have tried to succeed.” ~ Theodore Roosevelt

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