Should I transfer my Roth IRA from Edward Jones?

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Vanguard User
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Should I transfer my Roth IRA from Edward Jones?

Post by Vanguard User »

Hello. I have a Vanguard taxable account with just VTSAX in it. However, I am very much leaning towards opening a Roth IRA at Vanguard.

Reason: High front load fund (started with 5.75% and down to 3.75%) they are all in American Funds Class A and the ER is as high as over 1% in one of the funds my FA has invested in, high expense ratios and annual maintenance fees ($40).

I have done some research and it looks all went out of EJ. The three recommended were Vanguard, Fidelity and Charles Schwab.

I’ve had the account since 2007. It looks like I should be able to get the same ROI or better here compare to EJ with fees right?
Last edited by Vanguard User on Wed May 26, 2021 6:17 pm, edited 1 time in total.
Silk McCue
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by Silk McCue »

Welcome to Bogleheads!

Yes. Leave EJ and their high fees and never look back.

Cheers
Trader Joe
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by Trader Joe »

Vanguard User wrote: Wed May 26, 2021 5:55 pm Hello. I have a Vanguard taxable account with just VTSAX in it. However, I am very much leaning towards opening a Roth IRA at Vanguard.

Reason: High front load fund (started with 5.75% and down to 3.75%) they are all in American Funds Class A and the ER is as high as over 1% in one of the fives, high expense ratios and annual maintenance fees ($40).

I have done some research and it looks all went out of EJ. The three recommended were Vanguard, Fidelity and Charles Schwab.

I’ve had the account since 2007. It looks like I should be able to get the same ROI or better here compare to EJ with fees right?
Yes. I always avoid Edward Jones.
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by Vanguard User »

So it look like I will have to pay $95 termination fee and another $40 closing fee with EJ.

Is in-kind the quickest and cheapest route?
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RickBoglehead
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by RickBoglehead »

Reason: high front end loads.

Bad reason, already gone...
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by Vanguard User »

RickBoglehead wrote: Wed May 26, 2021 6:19 pm Reason: high front end loads.

Bad reason, already gone...
Aren’t the front load funds suppose to beat the average S&P 500?
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retired@50
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by retired@50 »

Vanguard User wrote: Wed May 26, 2021 6:20 pm
RickBoglehead wrote: Wed May 26, 2021 6:19 pm Reason: high front end loads.

Bad reason, already gone...
Aren’t the front load funds suppose to beat the average S&P 500?
This sounds like a myth started by an Edward Jones salesperson.

Regards,
This is one person's opinion. Nothing more.
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mickeyd
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by mickeyd »

$95 termination fee and another $40 closing fee
What, no shipping and handling fee?
Part-Owner of Texas | | “The CMH-the Cost Matters Hypothesis -is all that is needed to explain why indexing must and will work… Yes, it is that simple.” John C. Bogle
Ferdinand2014
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by Ferdinand2014 »

Vanguard User wrote: Wed May 26, 2021 6:20 pm
RickBoglehead wrote: Wed May 26, 2021 6:19 pm Reason: high front end loads.

Bad reason, already gone...
Aren’t the front load funds suppose to beat the average S&P 500?
No. It is a virtual guarantee of losing to the S&P 500.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett
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CAsage
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by CAsage »

Vanguard User wrote: Wed May 26, 2021 6:20 pm Aren’t the front load funds suppose to beat the average S&P 500?
Based on what? That's like saying buying canned goods on sale means they expire faster (ok, inverse analogy but solid logic). There is ABSOLUTELY no relation to front end fees and any long term return. You just take a hit up front and have less to invest. Your long term success in investing is driven entirely by the market - any diversified stock fund will over time earn the average of it's market. So, if your active manager is investing in the broad market but charging a front load or a heavier fee, your return will be commensurately lower over time. Read some of the investing theory books like "random walk down wall street" for the academics... For now, do whatever is cheapest to exit EJ - either sell everything to cash and move it, or move in kind, there's no tax hit within a Roth. But you want to dump those spendy funds and EJ.
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by Vanguard User »

retired@50 wrote: Wed May 26, 2021 6:23 pm
Vanguard User wrote: Wed May 26, 2021 6:20 pm
RickBoglehead wrote: Wed May 26, 2021 6:19 pm Reason: high front end loads.

Bad reason, already gone...
Aren’t the front load funds suppose to beat the average S&P 500?
This sounds like a myth started by an Edward Jones salesperson.

Regards,
They do make investing very complicated. Not sure, why I am in almost 10 different funds there. FA sends me the analysis of multiple pages with different scenarios. He also did my 401k rebalancing as well. I suppose I can do that with the help of Vanguard advisors for cheaper rate?
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MillennialFinance19
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by MillennialFinance19 »

Vanguard User wrote: Wed May 26, 2021 6:35 pm They do make investing very complicated. Not sure, why I am in almost 10 different funds there. FA sends me the analysis of multiple pages with different scenarios. He also did my 401k rebalancing as well. I suppose I can do that with the help of Vanguard advisors for cheaper rate?
Honestly, you don't need an advisor to help you rebalance your 401(k). Check out the 3-fund portfolio that is highly touted on this site. Heck, if you're young, you can just roll with a 100% VTSAX portfolio until you are 40+.
For the love of God, stick to your plan!!!
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by Vanguard User »

mickeyd wrote: Wed May 26, 2021 6:24 pm
$95 termination fee and another $40 closing fee
What, no shipping and handling fee?
LOL. I would think they would waive it due to my longevity and my brother has it even longer with EJ.
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by Vanguard User »

Ferdinand2014 wrote: Wed May 26, 2021 6:29 pm
Vanguard User wrote: Wed May 26, 2021 6:20 pm
RickBoglehead wrote: Wed May 26, 2021 6:19 pm Reason: high front end loads.

Bad reason, already gone...
Aren’t the front load funds suppose to beat the average S&P 500?
No. It is a virtual guarantee of losing to the S&P 500.
Or VTSAX?
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by Vanguard User »

CAsage wrote: Wed May 26, 2021 6:31 pm
Vanguard User wrote: Wed May 26, 2021 6:20 pm Aren’t the front load funds suppose to beat the average S&P 500?
Based on what? That's like saying buying canned goods on sale means they expire faster (ok, inverse analogy but solid logic). There is ABSOLUTELY no relation to front end fees and any long term return. You just take a hit up front and have less to invest. Your long term success in investing is driven entirely by the market - any diversified stock fund will over time earn the average of it's market. So, if your active manager is investing in the broad market but charging a front load or a heavier fee, your return will be commensurately lower over time. Read some of the investing theory books like "random walk down wall street" for the academics... For now, do whatever is cheapest to exit EJ - either sell everything to cash and move it, or move in kind, there's no tax hit within a Roth. But you want to dump those spendy funds and EJ.

What kind of customers are good for EJ? People who prefer face to face communication and emotional support?
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by Vanguard User »

MillennialFinance19 wrote: Wed May 26, 2021 6:42 pm
Vanguard User wrote: Wed May 26, 2021 6:35 pm They do make investing very complicated. Not sure, why I am in almost 10 different funds there. FA sends me the analysis of multiple pages with different scenarios. He also did my 401k rebalancing as well. I suppose I can do that with the help of Vanguard advisors for cheaper rate?
Honestly, you don't need an advisor to help you rebalance your 401(k). Check out the 3-fund portfolio that is highly touted on this site. Heck, if you're young, you can just roll with a 100% VTSAX portfolio until you are 40+.
I am a 43 year old male and single.
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by Vanguard User »

MillennialFinance19 wrote: Wed May 26, 2021 6:42 pm
Vanguard User wrote: Wed May 26, 2021 6:35 pm They do make investing very complicated. Not sure, why I am in almost 10 different funds there. FA sends me the analysis of multiple pages with different scenarios. He also did my 401k rebalancing as well. I suppose I can do that with the help of Vanguard advisors for cheaper rate?
Honestly, you don't need an advisor to help you rebalance your 401(k). Check out the 3-fund portfolio that is highly touted on this site. Heck, if you're young, you can just roll with a 100% VTSAX portfolio until you are 40+.
I do have just VTSAX that I started last year at Vanguard in my taxable account in September 2020 and so far I have a ROI of $987.22.
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WingsFan4Life
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by WingsFan4Life »

Being a Vanguard User such as yourself, you can just buy 2 ETFS Total world market index and total bond market index(VT & BND) at your desired allocations and you're set!
NancyABQ
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by NancyABQ »

Vanguard User wrote: Wed May 26, 2021 6:18 pm So it look like I will have to pay $95 termination fee and another $40 closing fee with EJ.

Is in-kind the quickest and cheapest route?
If the account in question is reasonably large (I have no idea what the cut-off of "reasonably large" is -- $25K? $50K?) then Fidelity or Schwab would probably reimburse you for the EJ closing fees if you ask them to. I have never had any trouble getting Schwab to do that, though the account sizes were low 6 figures.

The transfer-in-kind vs. sell at American funds before transfer question is being discussed on another thread. You need to find out if there would be back-end fees if you sell now. If the fees apply, then definitely transfer-in-kind and hold onto the shares (turning off dividend/cap gain reinvestment) until the holding period is over.

Personally I'd suggest transferring to Fidelity or Schwab because 1) They will hold your hand through the transfer and 2) They are more likely to be interested in refunding your account closing fees. But it depends on the details. You can still buy Vanguard funds in the account if you hold it at Schwab or Fidelity.

I echo all the others encouraging you to leave Edward Jones :)
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by retired@50 »

Vanguard User wrote: Wed May 26, 2021 6:35 pm
retired@50 wrote: Wed May 26, 2021 6:23 pm
Vanguard User wrote: Wed May 26, 2021 6:20 pm
RickBoglehead wrote: Wed May 26, 2021 6:19 pm Reason: high front end loads.

Bad reason, already gone...
Aren’t the front load funds suppose to beat the average S&P 500?
This sounds like a myth started by an Edward Jones salesperson.

Regards,
They do make investing very complicated. Not sure, why I am in almost 10 different funds there. FA sends me the analysis of multiple pages with different scenarios. He also did my 401k rebalancing as well. I suppose I can do that with the help of Vanguard advisors for cheaper rate?
My advice at this stage would be as follows:
1. Get a library card. Maybe here: https://www.fortbend.lib.tx.us/about-us ... sugar-land
2. Do some reading. Maybe one or two of these books: https://www.bogleheads.org/wiki/Books:_ ... nd_reviews
3. Save and invest.

Regards,
This is one person's opinion. Nothing more.
Ferdinand2014
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by Ferdinand2014 »

Vanguard User wrote: Wed May 26, 2021 6:54 pm
Ferdinand2014 wrote: Wed May 26, 2021 6:29 pm
Vanguard User wrote: Wed May 26, 2021 6:20 pm
RickBoglehead wrote: Wed May 26, 2021 6:19 pm Reason: high front end loads.

Bad reason, already gone...
Aren’t the front load funds suppose to beat the average S&P 500?
No. It is a virtual guarantee of losing to the S&P 500.
Or VTSAX?
VTSAX as well. Yes. Front end loads transfer wealth from the investor taking all the risk and putting it in the hands of the mutual fund company taking no risk. Front end loads are so 1990. The best predictor of a funds future performance relative to its benchmark are its fees/upfront costs. The lower the cost, the better the performance. Look up SPIVA. Also: https://www.morningstar.com/articles/75 ... or-failure
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett
Bonehead3
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by Bonehead3 »

Do whatever you have to do to get out of EJ. Been there sitting behind the desk. They are not there for customers but their money. Vanguard is unique--embrace that. No one cares about your money more than you do. No one.
tibbitts
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by tibbitts »

Bonehead3 wrote: Wed May 26, 2021 8:40 pm Do whatever you have to do to get out of EJ. Been there sitting behind the desk. They are not there for customers but their money. Vanguard is unique--embrace that. No one cares about your money more than you do. No one.
Well, at one point I would have agreed Vanguard is unique, and in a sense it still is, but not so much as before in ways that would affect a customer.
tibbitts
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by tibbitts »

Vanguard User wrote: Wed May 26, 2021 6:56 pm
CAsage wrote: Wed May 26, 2021 6:31 pm
Vanguard User wrote: Wed May 26, 2021 6:20 pm Aren’t the front load funds suppose to beat the average S&P 500?
Based on what? That's like saying buying canned goods on sale means they expire faster (ok, inverse analogy but solid logic). There is ABSOLUTELY no relation to front end fees and any long term return. You just take a hit up front and have less to invest. Your long term success in investing is driven entirely by the market - any diversified stock fund will over time earn the average of it's market. So, if your active manager is investing in the broad market but charging a front load or a heavier fee, your return will be commensurately lower over time. Read some of the investing theory books like "random walk down wall street" for the academics... For now, do whatever is cheapest to exit EJ - either sell everything to cash and move it, or move in kind, there's no tax hit within a Roth. But you want to dump those spendy funds and EJ.

What kind of customers are good for EJ? People who prefer face to face communication and emotional support?
Probably. I believe most Bogleheads greatly underestimate the amount of time and effort they've expended to get to the point many of them are in terms of general knowledge about investing. So people who don't have the inclination or interest to put in some effort are going to pay one way or the other. I'm not familiar with EJ's fee structure, but AUM plus sales charges would be worse than most full-service firms that I'm aware of.
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by Vanguard User »

WingsFan4Life wrote: Wed May 26, 2021 7:00 pm Being a Vanguard User such as yourself, you can just buy 2 ETFS Total world market index and total bond market index(VT & BND) at your desired allocations and you're set!
I have always been an aggressive investor. Why a bond fund? Also, my retirement is anywhere between age 55-60.
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by Vanguard User »

NancyABQ wrote: Wed May 26, 2021 7:14 pm
Vanguard User wrote: Wed May 26, 2021 6:18 pm So it look like I will have to pay $95 termination fee and another $40 closing fee with EJ.

Is in-kind the quickest and cheapest route?
If the account in question is reasonably large (I have no idea what the cut-off of "reasonably large" is -- $25K? $50K?) then Fidelity or Schwab would probably reimburse you for the EJ closing fees if you ask them to. I have never had any trouble getting Schwab to do that, though the account sizes were low 6 figures.

The transfer-in-kind vs. sell at American funds before transfer question is being discussed on another thread. You need to find out if there would be back-end fees if you sell now. If the fees apply, then definitely transfer-in-kind and hold onto the shares (turning off dividend/cap gain reinvestment) until the holding period is over.

Personally I'd suggest transferring to Fidelity or Schwab because 1) They will hold your hand through the transfer and 2) They are more likely to be interested in refunding your account closing fees. But it depends on the details. You can still buy Vanguard funds in the account if you hold it at Schwab or Fidelity.

I echo all the others encouraging you to leave Edward Jones :)
$140k+ in Roth IRA. My 401k and ESPP is at Fidelity.
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by Vanguard User »

retired@50 wrote: Wed May 26, 2021 7:41 pm
Vanguard User wrote: Wed May 26, 2021 6:35 pm
retired@50 wrote: Wed May 26, 2021 6:23 pm
Vanguard User wrote: Wed May 26, 2021 6:20 pm
RickBoglehead wrote: Wed May 26, 2021 6:19 pm Reason: high front end loads.

Bad reason, already gone...
Aren’t the front load funds suppose to beat the average S&P 500?
This sounds like a myth started by an Edward Jones salesperson.

Regards,
They do make investing very complicated. Not sure, why I am in almost 10 different funds there. FA sends me the analysis of multiple pages with different scenarios. He also did my 401k rebalancing as well. I suppose I can do that with the help of Vanguard advisors for cheaper rate?
My advice at this stage would be as follows:
1. Get a library card. Maybe here: https://www.fortbend.lib.tx.us/about-us ... sugar-land
2. Do some reading. Maybe one or two of these books: https://www.bogleheads.org/wiki/Books:_ ... nd_reviews
3. Save and invest.

Regards,
Which books do you recommend?
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by Vanguard User »

Ferdinand2014 wrote: Wed May 26, 2021 7:44 pm
Vanguard User wrote: Wed May 26, 2021 6:54 pm
Ferdinand2014 wrote: Wed May 26, 2021 6:29 pm
Vanguard User wrote: Wed May 26, 2021 6:20 pm
RickBoglehead wrote: Wed May 26, 2021 6:19 pm Reason: high front end loads.

Bad reason, already gone...
Aren’t the front load funds suppose to beat the average S&P 500?
No. It is a virtual guarantee of losing to the S&P 500.
Or VTSAX?
VTSAX as well. Yes. Front end loads transfer wealth from the investor taking all the risk and putting it in the hands of the mutual fund company taking no risk. Front end loads are so 1990. The best predictor of a funds future performance relative to its benchmark are its fees/upfront costs. The lower the cost, the better the performance. Look up SPIVA. Also: https://www.morningstar.com/articles/75 ... or-failure
Thanks.
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by Vanguard User »

Bonehead3 wrote: Wed May 26, 2021 8:40 pm Do whatever you have to do to get out of EJ. Been there sitting behind the desk. They are not there for customers but their money. Vanguard is unique--embrace that. No one cares about your money more than you do. No one.
You were a EJ employee?
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by Vanguard User »

tibbitts wrote: Wed May 26, 2021 9:04 pm
Bonehead3 wrote: Wed May 26, 2021 8:40 pm Do whatever you have to do to get out of EJ. Been there sitting behind the desk. They are not there for customers but their money. Vanguard is unique--embrace that. No one cares about your money more than you do. No one.
Well, at one point I would have agreed Vanguard is unique, and in a sense it still is, but not so much as before in ways that would affect a customer.
What’s different now?
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by Vanguard User »

tibbitts wrote: Wed May 26, 2021 9:10 pm
Vanguard User wrote: Wed May 26, 2021 6:56 pm
CAsage wrote: Wed May 26, 2021 6:31 pm
Vanguard User wrote: Wed May 26, 2021 6:20 pm Aren’t the front load funds suppose to beat the average S&P 500?
Based on what? That's like saying buying canned goods on sale means they expire faster (ok, inverse analogy but solid logic). There is ABSOLUTELY no relation to front end fees and any long term return. You just take a hit up front and have less to invest. Your long term success in investing is driven entirely by the market - any diversified stock fund will over time earn the average of it's market. So, if your active manager is investing in the broad market but charging a front load or a heavier fee, your return will be commensurately lower over time. Read some of the investing theory books like "random walk down wall street" for the academics... For now, do whatever is cheapest to exit EJ - either sell everything to cash and move it, or move in kind, there's no tax hit within a Roth. But you want to dump those spendy funds and EJ.

What kind of customers are good for EJ? People who prefer face to face communication and emotional support?
Probably. I believe most Bogleheads greatly underestimate the amount of time and effort they've expended to get to the point many of them are in terms of general knowledge about investing. So people who don't have the inclination or interest to put in some effort are going to pay one way or the other. I'm not familiar with EJ's fee structure, but AUM plus sales charges would be worse than most full-service firms that I'm aware of.
I posted my fees in the initial post.
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by retired@50 »

Vanguard User wrote: Wed May 26, 2021 10:23 pm
Which books do you recommend?
For starters, a good one that's a quick read is John Bogle's "Little Book Of Common Sense Investing".
For a bit more depth, I like William Bernstein's "The Four Pillars Of Investing" or "The Investor's Manifesto".
For a touch of humor, consider "Where Are The Customer's Yachts" by Fred Schwed Jr.

My approach to learning is to read voraciously. I like to get multiple perspectives, from multiple authors. At last count I've read over 100 books about finance, investing, retirement, behavioral finance, etc.

I also believe that making full use of your local public library is an excellent way to get started on a reading habit. By having a due date for a book, I find that little bit of motivation allows me to read more books than if I owned them and didn't feel any time pressure to finish.

Regards,
This is one person's opinion. Nothing more.
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by Vanguard User »

retired@50 wrote: Thu May 27, 2021 12:07 am
Vanguard User wrote: Wed May 26, 2021 10:23 pm
Which books do you recommend?
For starters, a good one that's a quick read is John Bogle's "Little Book Of Common Sense Investing".
For a bit more depth, I like William Bernstein's "The Four Pillars Of Investing" or "The Investor's Manifesto".
For a touch of humor, consider "Where Are The Customer's Yachts" by Fred Schwed Jr.

My approach to learning is to read voraciously. I like to get multiple perspectives, from multiple authors. At last count I've read over 100 books about finance, investing, retirement, behavioral finance, etc.

I also believe that making full use of your local public library is an excellent way to get started on a reading habit. By having a due date for a book, I find that little bit of motivation allows me to read more books than if I owned them and didn't feel any time pressure to finish.

Regards,
Thanks. What about Simple path to wealth by JL Collins?
HomeStretch
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by HomeStretch »

Vanguard User wrote: Wed May 26, 2021 6:18 pm … Is in-kind the quickest and cheapest route?
There are no tax consequences for selling holdings in a Roth account. Sell at EJ and transfer cash to Fidelity or Vanguard. Alternatively, if the funds are not proprietary, you may be able to transfer in-kind but check with your new brokerage to see if the funds will transfer and if there are any fees to sell. Initiate the account transfer at the new brokerage.
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by RickBoglehead »

Vanguard User wrote: Wed May 26, 2021 10:23 pm
Which books do you recommend?
Have you read the Wiki? List of books there.
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.
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retired@50
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by retired@50 »

Vanguard User wrote: Thu May 27, 2021 12:24 am
Thanks. What about Simple path to wealth by JL Collins?
This is one of the few books I've seen mentioned on the forum that I haven't read. Other forum members have been complimentary of the book.

My local library only seems to have the book in electronic form, and since I don't own an e-reader I'm sort of stuck.

Regards,
This is one person's opinion. Nothing more.
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by hnd »

tibbitts wrote: Wed May 26, 2021 9:10 pm
Vanguard User wrote: Wed May 26, 2021 6:56 pm
CAsage wrote: Wed May 26, 2021 6:31 pm
Vanguard User wrote: Wed May 26, 2021 6:20 pm Aren’t the front load funds suppose to beat the average S&P 500?
Based on what? That's like saying buying canned goods on sale means they expire faster (ok, inverse analogy but solid logic). There is ABSOLUTELY no relation to front end fees and any long term return. You just take a hit up front and have less to invest. Your long term success in investing is driven entirely by the market - any diversified stock fund will over time earn the average of it's market. So, if your active manager is investing in the broad market but charging a front load or a heavier fee, your return will be commensurately lower over time. Read some of the investing theory books like "random walk down wall street" for the academics... For now, do whatever is cheapest to exit EJ - either sell everything to cash and move it, or move in kind, there's no tax hit within a Roth. But you want to dump those spendy funds and EJ.

What kind of customers are good for EJ? People who prefer face to face communication and emotional support?
Probably. I believe most Bogleheads greatly underestimate the amount of time and effort they've expended to get to the point many of them are in terms of general knowledge about investing. So people who don't have the inclination or interest to put in some effort are going to pay one way or the other. I'm not familiar with EJ's fee structure, but AUM plus sales charges would be worse than most full-service firms that I'm aware of.
+1. I used to tell people its easy. but in truth to understand a simple vtsax and relax methodology it sometimes takes a bit of personal convincing. and there is a lot of time it takes for many to do that personal convincing. a lot of people don't want to read a book, watch youtube videos, etc. they want to live their life and have someone else care for their finances.
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by pkcrafter »

Welcome Vanguard User,

EJ has a long list of fees, and it's a very good idea to move to Vanguard, Fidelity, or Schwab. Before you move, make sure you use a custodian to custodian direct transfer, which is initiated by the new company. Fidelity and Schwab may give you a signing bonus.

EJ fees

https://topratedfirms.com/brokers/fees/ ... edule.aspx
Reason: High front load fund (started with 5.75% and down to 3.75%) they are all in American Funds Class A and the ER is as high as over 1% in one of the funds my FA has invested in, high expense ratios and annual maintenance fees ($40).
I"m not sure what's going here, but a front-end load (class A funds) charge a 5.75% commission on purchase, so your actual invested money is less than what you gave the advisor to start with. The fee is not ongoing, so it wouldn't drop from 5.75% to 3.75%. Are you saying the front-end load is now 3.75% for new fund purchases?

Paul
Last edited by pkcrafter on Thu May 27, 2021 2:09 pm, edited 1 time in total.
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.
hnd
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by hnd »

pkcrafter wrote: Thu May 27, 2021 9:59 am
I"m not sure what's going here, but a front-end load (class A funds) charge a 5.75% commission on purchase, so your actual invested money is less that what you gave the advisor to start with. The fee is not ongoing, so it wouldn't drop from 5.75% to 3.75%. Are you saying the front-end load is now 3.75% for new fund purchases?

Paul
my parents purchase front load AF funds direct from CG each deposit was 5.75% and has shrunk to about 1% i believe. Some funds at AF are 3.75%.

in defense of Front load vs AUM, if they'd of purchased similar performing mutual funds and paid AUM they would be significantly poorer than they are today. obviously most of us here forgo any advisor fee.
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by pedalman701 »

Silk McCue wrote: Wed May 26, 2021 6:13 pm Welcome to Bogleheads!

Yes. Leave EJ and their high fees and never look back.

Cheers
Agreed. Just pay the cancellation fees and get the H-E-double hockeysticks away from EJ.
A Recovering Jonesoholic
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ruralavalon
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by ruralavalon »

Welcome to the forum :) .

Escape from Edward Jones as soon as you can.

Vanguard User wrote: Wed May 26, 2021 5:55 pm Hello. I have a Vanguard taxable account with just VTSAX in it. However, I am very much leaning towards opening a Roth IRA at Vanguard.

Reason: High front load fund (started with 5.75% and down to 3.75%) they are all in American Funds Class A and the ER is as high as over 1% in one of the funds my FA has invested in, high expense ratios and annual maintenance fees ($40).

I have done some research and it looks all went out of EJ. The three recommended were Vanguard, Fidelity and Charles Schwab.

I’ve had the account since 2007. It looks like I should be able to get the same ROI or better here compare to EJ with fees right?
Vanguard User wrote: Wed May 26, 2021 10:22 pm$140k+ in Roth IRA. My 401k and ESPP is at Fidelity.
Do a rollover of your Edward Jones Roth IRA to a Roth IRA at either Vanguard (where you have your taxable account) or Fidelity (where you have your 401k and ESPP). Either would be much better for you than Edward Jones, it's largely a matter of personal preference, my personal preference would be Vanguard.

Low expense ratios are critical to long-term investing performance. Seemingly small annual fees can have a large cumulative impact over time. Here is a "Mutual fund fees calculator" you could use to estimate the impact of investing expenses.

Also, low expense ratios are the best predictor of future performance. Morningstar, 8/9/10 . “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.”

"The expense ratio is the most proven predictor of future fund returns." "There are many other things to consider, but investors should make expense ratios their first or second screen." Morningstar, 5/5/18.

In general index funds have usually done better than actively managed funds. Please see:
Index Fund Advisors (10/7/2020), “SPIVA: 2020 Mid-Year Active vs. Passive Scorecard“, link.

Vanguard User wrote: Wed May 26, 2021 10:23 pmWhich books do you recommend?
Here is a wiki article you could read to start educating yourself: "Bogleheads® investment philosophy. For a quick overview of investing basics for the new do-it-yourself investor read Dr. Bernstein's short book, "If You Can". I suggest reading one or two books on general investing. Wiki article, "Books: recommendations and reviews"
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by Vanguard User »

HomeStretch wrote: Thu May 27, 2021 5:36 am
Vanguard User wrote: Wed May 26, 2021 6:18 pm … Is in-kind the quickest and cheapest route?
There are no tax consequences for selling holdings in a Roth account. Sell at EJ and transfer cash to Fidelity or Vanguard. Alternatively, if the funds are not proprietary, you may be able to transfer in-kind but check with your new brokerage to see if the funds will transfer and if there are any fees to sell. Initiate the account transfer at the new brokerage.
Can I sell my EJ funds at Vanguard? How do I know if funds are not proprietary?
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by Vanguard User »

RickBoglehead wrote: Thu May 27, 2021 5:49 am
Vanguard User wrote: Wed May 26, 2021 10:23 pm
Which books do you recommend?
Have you read the Wiki? List of books there.
Yes but they are not free.
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by ruralavalon »

Vanguard User wrote: Thu May 27, 2021 12:49 pm
HomeStretch wrote: Thu May 27, 2021 5:36 am
Vanguard User wrote: Wed May 26, 2021 6:18 pm … Is in-kind the quickest and cheapest route?
There are no tax consequences for selling holdings in a Roth account. Sell at EJ and transfer cash to Fidelity or Vanguard. Alternatively, if the funds are not proprietary, you may be able to transfer in-kind but check with your new brokerage to see if the funds will transfer and if there are any fees to sell. Initiate the account transfer at the new brokerage.
Can I sell my EJ funds at Vanguard? How do I know if funds are not proprietary?
Get your latest Roth IRA account statement, then call Vanguard or Fidelity or wherever you want your Roth IRA to be, and ask if you can transfer your funds in-kind.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by Vanguard User »

retired@50 wrote: Thu May 27, 2021 8:14 am
Vanguard User wrote: Thu May 27, 2021 12:24 am
Thanks. What about Simple path to wealth by JL Collins?
This is one of the few books I've seen mentioned on the forum that I haven't read. Other forum members have been complimentary of the book.

My local library only seems to have the book in electronic form, and since I don't own an e-reader I'm sort of stuck.

Regards,
Do you have a smartphone? If so, it does have a reader.
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by Vanguard User »

hnd wrote: Thu May 27, 2021 9:06 am
tibbitts wrote: Wed May 26, 2021 9:10 pm
Vanguard User wrote: Wed May 26, 2021 6:56 pm
CAsage wrote: Wed May 26, 2021 6:31 pm
Vanguard User wrote: Wed May 26, 2021 6:20 pm Aren’t the front load funds suppose to beat the average S&P 500?
Based on what? That's like saying buying canned goods on sale means they expire faster (ok, inverse analogy but solid logic). There is ABSOLUTELY no relation to front end fees and any long term return. You just take a hit up front and have less to invest. Your long term success in investing is driven entirely by the market - any diversified stock fund will over time earn the average of it's market. So, if your active manager is investing in the broad market but charging a front load or a heavier fee, your return will be commensurately lower over time. Read some of the investing theory books like "random walk down wall street" for the academics... For now, do whatever is cheapest to exit EJ - either sell everything to cash and move it, or move in kind, there's no tax hit within a Roth. But you want to dump those spendy funds and EJ.

What kind of customers are good for EJ? People who prefer face to face communication and emotional support?
Probably. I believe most Bogleheads greatly underestimate the amount of time and effort they've expended to get to the point many of them are in terms of general knowledge about investing. So people who don't have the inclination or interest to put in some effort are going to pay one way or the other. I'm not familiar with EJ's fee structure, but AUM plus sales charges would be worse than most full-service firms that I'm aware of.
+1. I used to tell people its easy. but in truth to understand a simple vtsax and relax methodology it sometimes takes a bit of personal convincing. and there is a lot of time it takes for many to do that personal convincing. a lot of people don't want to read a book, watch youtube videos, etc. they want to live their life and have someone else care for their finances.
It took me a while to invest in VTSAX. Because I thought I was putting my eggs in one basket because it’s just 1 fund I would be relying. It’s not a single stock and that was kinda my assumption.
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by Vanguard User »

pkcrafter wrote: Thu May 27, 2021 9:59 am Welcome Vanguard User,

EJ has a long list of fees, and it's a very good idea to move to Vanguard, Fidelity, or Schwab. Before you move, make sure you use a custodian to custodian direct transfer, which is initiated by the new company. Fidelity and Schwab may give you a signing bonus.

EJ fees

https://topratedfirms.com/brokers/fees/ ... edule.aspx
Reason: High front load fund (started with 5.75% and down to 3.75%) they are all in American Funds Class A and the ER is as high as over 1% in one of the funds my FA has invested in, high expense ratios and annual maintenance fees ($40).
I"m not sure what's going here, but a front-end load (class A funds) charge a 5.75% commission on purchase, so your actual invested money is less that what you gave the advisor to start with. The fee is not ongoing, so it wouldn't drop from 5.75% to 3.75%. Are you saying the front-end load is now 3.75% for new fund purchases?

Paul
Front load fees go down when I get to certain account balance.
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CAsage
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by CAsage »

Vanguard User wrote: Thu May 27, 2021 12:55 pm Yes but they are not free.
Seriously? With the money you have lost over the last 20 (?) years at EJ or elsewhere, and the now $ thousand dollar per year minimum you will be saving with index funds, you can buy a book. Used on ebay, or free at the library is completely fine. Get one of the top book recommendations, maybe read one this year and one next year.... I'm quite fond of Malkiel, but Shiller, Bernstein, Bogle, Burns.... the library undoubtedly has an excellent suggestion for FREE.
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by hnd »

Vanguard User wrote: Thu May 27, 2021 1:01 pm
hnd wrote: Thu May 27, 2021 9:06 am
tibbitts wrote: Wed May 26, 2021 9:10 pm
Vanguard User wrote: Wed May 26, 2021 6:56 pm
CAsage wrote: Wed May 26, 2021 6:31 pm

Based on what? That's like saying buying canned goods on sale means they expire faster (ok, inverse analogy but solid logic). There is ABSOLUTELY no relation to front end fees and any long term return. You just take a hit up front and have less to invest. Your long term success in investing is driven entirely by the market - any diversified stock fund will over time earn the average of it's market. So, if your active manager is investing in the broad market but charging a front load or a heavier fee, your return will be commensurately lower over time. Read some of the investing theory books like "random walk down wall street" for the academics... For now, do whatever is cheapest to exit EJ - either sell everything to cash and move it, or move in kind, there's no tax hit within a Roth. But you want to dump those spendy funds and EJ.

What kind of customers are good for EJ? People who prefer face to face communication and emotional support?
Probably. I believe most Bogleheads greatly underestimate the amount of time and effort they've expended to get to the point many of them are in terms of general knowledge about investing. So people who don't have the inclination or interest to put in some effort are going to pay one way or the other. I'm not familiar with EJ's fee structure, but AUM plus sales charges would be worse than most full-service firms that I'm aware of.
+1. I used to tell people its easy. but in truth to understand a simple vtsax and relax methodology it sometimes takes a bit of personal convincing. and there is a lot of time it takes for many to do that personal convincing. a lot of people don't want to read a book, watch youtube videos, etc. they want to live their life and have someone else care for their finances.

It took me a while to invest in VTSAX. Because I thought I was putting my eggs in one basket because it’s just 1 fund I would be relying. It’s not a single stock and that was kinda my assumption.
the idea of having just 1 fund is very unusual for anyone especially the person with just a glancing interest in the markets. people here diversification diversification diversification and think it requires multiple funds. I've seen people buy 3 funds to diversify. they'll be 3 large cap growth funds and be like boom done diversified!
hnd
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Re: Should I transfer my Roth IRA from Edward Jones?

Post by hnd »

CAsage wrote: Thu May 27, 2021 1:36 pm
Vanguard User wrote: Thu May 27, 2021 12:55 pm Yes but they are not free.
Seriously? With the money you have lost over the last 20 (?) years at EJ or elsewhere, and the now $ thousand dollar per year minimum you will be saving with index funds, you can buy a book. Used on ebay, or free at the library is completely fine. Get one of the top book recommendations, maybe read one this year and one next year.... I'm quite fond of Malkiel, but Shiller, Bernstein, Bogle, Burns.... the library undoubtedly has an excellent suggestion for FREE.
every key financial book that exists is currently available in digital or paper form at our small local library. I'm sure it is elsewhere too.
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