Why Edward Jones?

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CABob
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Why Edward Jones?

Post by CABob » Thu Jan 04, 2018 4:16 pm

There seems to be a large number of post on this forum that go something like, “I’ve had an account with Full Service Broker for some time and realize that I might save some money buy going to another broker such as Fidguard.” The post generally goes on about the number of funds (or stocks), the expenses, fees, etc. and the responders help with information and suggestions. It seems that the Full Service Broker mentioned is very often Edward Jones and I am wondering why? EJ seems to have a different business model than most other brokers. They frequently have small offices located in malls, shopping centers, etc. while the big names usually have very impressive, somewhat intimidating, standalone buildings with the company name on a sign out front. The EJ brokers are often more involved in the communities they serve and in some cases go door to door introducing themselves soliciting business. I suspect the many of the big name brokers are more inclined to solicit business at the country club, networking groups, etc.
If this is true are the EJ brokers more apt to gain younger inexperienced clients that only realize the situation after they have been with them for a while?
Thoughts?
Bob

livesoft
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Re: Why Edward Jones?

Post by livesoft » Thu Jan 04, 2018 4:24 pm

I suspect that EJ is embedded into smaller communities because the office can extract enough fees and income from clients to make a good living that way. In such communities, the EJ office would be visible right there in town, so familiarity is all that is needed. It might be right there next door to the State Farm office or the First National bank.

It is also possible the the EJ person also is the pastor of the church.

One would not see a Schwab, Fidelity, nor TDAmeritrade office in such locations because they charge so much less and would need more clients to survive ... more clients than might even be available in the county or tri-city area.
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Doc
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Re: Why Edward Jones?

Post by Doc » Thu Jan 04, 2018 4:25 pm

CABob wrote:
Thu Jan 04, 2018 4:16 pm
It seems that the Full Service Broker mentioned is very often Edward Jones and I am wondering why? EJ seems to have a different business model than most other brokers. They frequently have small offices located in malls, shopping centers, etc. while the big names usually have very impressive, somewhat intimidating, standalone buildings with the company name on a sign out front.
So that our new college grads can all find a "career" close to home.

http://careers.edwardjones.com/index.html
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.

bloom2708
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Re: Why Edward Jones?

Post by bloom2708 » Thu Jan 04, 2018 4:30 pm

This is just my experience/thoughts.

Even the name Edward Jones is not threatening. They are everywhere. Strip malls. Neighborhood shopping centers. They do a great job marketing.

They are salesman, meant to help you (some) and help them earning a better than average living.

My former (3 year failed experiment) EJ advisor is a good example. Greatest guy you will meet. Former physical conditioning type role. Transitioned later in life to the EJ role. It is about people and connections. When I signed up, I was in the early "don't know much at all stage".

The funds were expensive. A mix of A and C shares. Front end sales loads, high expense ratios. Too many funds. Instead of buy more of Stock fund A, you get Stock fund B. New commissions. You end up with a dozen or more funds that all overlap. Fees and expenses are hidden on the site. You have to go off site to find an expense ratio. "Advisory" funds are pushed as flagship funds. Again, made up of too many funds. Lots of churn.

The fees add up and fast. I don't think EJ is necessarily worse than other full service advisor group. They are just all over.

Once your eyes are opened to the various types of fees, they cannot be closed. I had an Oppenheimer fund with a 2.2% Expense Ratio. I know you can find funds with really high fees. That just happened to be one of the first funds I was served. Great performance last year.

I am still friends with the guy. Just moved to a DIY index approach at Vanguard. I went from an Expense Ratio of between 1.5% and 2.% to .07% at Vanguard. If you read the EJ threads, they have common elements. Some detest, some are unaware, some can find the "they aren't that bad" side. If the market goes up, your account balances go up. You just get those fees silently removed up front or along the way.
"We are not here to please, but to provoke thoughtfulness." --Unknown Boglehead

alex_686
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Re: Why Edward Jones?

Post by alex_686 » Thu Jan 04, 2018 4:37 pm

FYI, one of my past jobs was forecasting profitability of newbie financial advisories.

EJ in my opinion is no better and no worse then other brokerage houses. I find that high quality and low quality advisories are evenly distributed across brokerage firms. I notice people complain of bad ones but never of the good ones. We also skew to DIY on this website. So I would but this down to reporting bias and nothing against the firm itself.

2 issues.

The first issue is that of cost structure for the middle market that EJ serves. There is no way to offer personalized advice at a reasonable cost. A FA can serve about 250 to 500 families. Figure out a reasonable salary to cover salary and cost of overhead for a FA and figure out the asset base that they serve. It is grim.

This ties into the second issue is the quality of advice and the ethics of the FA. Or maybe the other side of the coin. We can talk about the conflicts of interest, the depth of education, etc. They are a minefield both a the mid-market and the up-market. Different minefields, but still minefields. Some FAs handle this well, others do not. Most FAs are salespeople, not economist.

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Portfolio7
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Re: Why Edward Jones?

Post by Portfolio7 » Thu Jan 04, 2018 4:40 pm

EJ is big and growing, so I expect they will pop up a lot in this sort of discussion. I don't think they last long in that business model unless they're at least a pretty good salesperson. I know a successful advisor at EJ. I like the guy well enough,he's personable and reasonably bright. However, he either lies or doesn't fully understand his company's business arrangements.

My first advisor was with Ameriprise and I got rooked for a few grand. Ameriprise was recommended through my F500 company.

I've been investing on my own for 15 years now.... though I did recently engage an advisor for a one-off. She's a specialist in a very complex arena and is part of a package deal with a non-financial specialist we also need advice from.

My observation is that this represents a transition from an open-ended arrangement, common with folks who are new to finance or don't have pertinent skills - to a specific fee for service for specialized knowledge.
An investment in knowledge pays the best interest.

renue74
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Re: Why Edward Jones?

Post by renue74 » Thu Jan 04, 2018 4:53 pm

This blog post explains EJ the best I've ever read. I actually found it here on this forum:

http://kronstantinople.blogspot.com/p/e ... -saga.html

On a side note, recently in my Nextdoor neighborhood site, someone posted a request for a FA. It's amazing how many local one man, independent shops there are in my small 60K population town....all fighting for the same portfolios.

As an experiment, I laid out a very thoughtful argument of why most folks could save a lot of money by managing their money themselves. I shared the Boglehead website, details about active funds not beating the market over the long haul, the visible AND hidden expenses of using a FA and the EJ link above. It was easily a 500 word Nextdoor post. :)

It got no traction. :oops:
Last edited by renue74 on Thu Jan 04, 2018 5:18 pm, edited 1 time in total.

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Alexa9
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Re: Why Edward Jones?

Post by Alexa9 » Thu Jan 04, 2018 4:59 pm

I am surprised that there aren't more fiduciary hourly fee only advisors popping up with CFP designations.
There is a market for it but it seems many people tend to follow their parents investing strategy.

dbr
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Re: Why Edward Jones?

Post by dbr » Thu Jan 04, 2018 5:25 pm

Alexa9 wrote:
Thu Jan 04, 2018 4:59 pm
I am surprised that there aren't more fiduciary hourly fee only advisors popping up with CFP designations.
There is a market for it but it seems many people tend to follow their parents investing strategy.
Investors can't afford to pay what an advisor needs to earn to stay in business.

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Alexa9
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Re: Why Edward Jones?

Post by Alexa9 » Thu Jan 04, 2018 5:29 pm

dbr wrote:
Thu Jan 04, 2018 5:25 pm
Alexa9 wrote:
Thu Jan 04, 2018 4:59 pm
I am surprised that there aren't more fiduciary hourly fee only advisors popping up with CFP designations.
There is a market for it but it seems many people tend to follow their parents investing strategy.
Investors can't afford to pay what an advisor needs to earn to stay in business.
Certainly there is a better business model for financial advice than Edward Jones when people need hand holding. Perhaps Vanguard's Ask a CFP?

alex_686
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Re: Why Edward Jones?

Post by alex_686 » Thu Jan 04, 2018 5:35 pm

Alexa9 wrote:
Thu Jan 04, 2018 5:29 pm
dbr wrote:
Thu Jan 04, 2018 5:25 pm
Alexa9 wrote:
Thu Jan 04, 2018 4:59 pm
I am surprised that there aren't more fiduciary hourly fee only advisors popping up with CFP designations.
There is a market for it but it seems many people tend to follow their parents investing strategy.
Investors can't afford to pay what an advisor needs to earn to stay in business.
Certainly there is a better business model for financial advice than Edward Jones when people need hand holding. Perhaps Vanguard's Ask a CFP?
Maybe. Fee only CFP works best when the client more or less knows what they are doing. Tricky questions, optimization, independent overview. The client has to have confidence in what they are doing.

The model works less well if the client needs lots of hand holding.

Another issue is that it is harder to run the business. You don't have a a steady asset base which is kicking a small management fee out every month. You need to hustle every month to find new clients.

Not saying it can't be done but it is not a slam dunk.

Dead Man Walking
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Re: Why Edward Jones?

Post by Dead Man Walking » Thu Jan 04, 2018 6:50 pm

I looked for a fee only advisor using the DFA website. Most had minimum requirements between $250,000 and $1,000,000. EJ will get an account started with $250. That's one reason why EJ is popular. The EJ advisor that I know steers clients to American Funds. There are worse funds.

DMW

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KSOC
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Re: Why Edward Jones?

Post by KSOC » Thu Jan 04, 2018 7:33 pm

I have friends, ok, Facebook friends, who post stuff about how great EJ is. Someone is sure to comment how they love their EJ person & how great they did last year. I stay silent, to me it's talking to the wall.

Although tonite someone asked for book recommendations. I replied "Bogleheads Guide to Investing". I said I wish I had read it at their age (30).They replied that they could use help in that area. Hope they follow through.
Too soon old, too late smart.

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Alskar
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Re: Why Edward Jones?

Post by Alskar » Thu Jan 04, 2018 8:00 pm

One of my best and closest friends has all of his retirement money at Edward Jones. He lives in a small town on the Oregon coast and likes the fact that he can have face-to-face conversations with his "advisor" as needed. I've tried a couple of time to open his eyes to the fees that he's being charged, but he doesn't seem to want to know or care.

From what he has shared with me, I would say Edward Jones is definitely below average in terms of advice. My friend is in a variety of front-loaded funds with high ER's. In my personal hierarchy, I put Edward Jones just barely above Ameriprise in terms of overall value for the money. The fees my friend is being charged are obscene. He'd be way better off with a robo-advisor.
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dbr
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Re: Why Edward Jones?

Post by dbr » Thu Jan 04, 2018 8:37 pm

Don't forget that taking money away from people who are not smart enough to keep it is an honored part of the American way of life -- or for that matter the honored way of life most anywhere. This is not just a snide comment but a part of the serious explanation for why this sort of thing persists.

Dead Man Walking
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Re: Why Edward Jones?

Post by Dead Man Walking » Thu Jan 04, 2018 11:14 pm

After reading this thread, I googled to locate investment advisors in my area. I was amazed by the number of Edward Jones advisors that were available in the rural area in which I live. Nearly every small town has one, and a city of 16,000 nearby has 3 of them. There is a Raymond James advisor and a Wells Fargo advisor in the larger town. Of course, most insurance agents and banks offer investments. Those of us who live in the hinterlands don't have many choices when it comes to investment advisors. Thank God for the internet!

DMW

columbia
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Re: Why Edward Jones?

Post by columbia » Thu Jan 04, 2018 11:32 pm

My otherwise intelligent boss at work uses an Edward Jones advisor. I’m s nit my place to comment on the matter.

:confused

not4me
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Re: Why Edward Jones?

Post by not4me » Fri Jan 05, 2018 3:20 pm

alex_686 wrote:
Thu Jan 04, 2018 4:37 pm

EJ in my opinion is no better and no worse then other brokerage houses. I find that high quality and low quality advisories are evenly distributed across brokerage firms. I notice people complain of bad ones but never of the good ones. We also skew to DIY on this website. So I would but this down to reporting bias and nothing against the firm itself.
This got to much of what came to my mind initially. I would add that some people just prefer to deal with a person face to face & in certain areas that can be hard to come by. Some people do not WANT to have to think about this. To them, why DIY if you can outsource?

I've known a few EJ guys & many of their clients. EJ is usually good at both sales & service & whether it is "worth" the money or not may be more subjective than some think

Jayhawk11
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Re: Why Edward Jones?

Post by Jayhawk11 » Fri Jan 05, 2018 3:28 pm

My Mom uses Edward Jones, in spite of my exhortations. Why does she do it? Because, like many Americans, money/saving/retirement are scary and don't come easy. She thinks if she gives money to a "professional" every month, she is being taken care of and doesn't have to "worry" about her finances. The person is in town, friendly, and easy to reach. Plus, she doesn't have to take ownership of market losses.

And you know what? Even though EJ sucks, my Mom probably has saved a lot more for retirement with them than without them, because she wouldn't be doing it on her own. Logging into Vanguard and transferring money into funds is "too complicated."

CurlyDave
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Re: Why Edward Jones?

Post by CurlyDave » Fri Jan 05, 2018 3:57 pm

Not all of the advisors at EJ are CFPs either.

I know that one of our neighbor's adult (45 ish) kids worked there for a while. He is so financially astute that he withdrew 100% of his state pension and lost it all in a Ponzi scheme.

The way the deal at EJ worked was that he was supposed to be paid on commission but they charged him for the leads they gave him. He left owing them money for the leads without making any sales, but I could see that the incentives did not favor the clients at EJ.

For non self-motivated savers there may be some merit in EJ since they will bug you to give them more and more money.

I think their most valuable clients (valuable to them that is) are actually older retired people with a nest egg large enough that they can bleed commissions from it for years before they deplete it.

psteinx
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Re: Why Edward Jones?

Post by psteinx » Fri Jan 05, 2018 4:15 pm

I think too often the assumption by folks on this forum is something like:

1) Ed Jones. Save 10-20% of paycheck, invest in maybe a 70/30 portfolio.

or

2) Direct investing with Vanguard at around 0.10%. For the really extravagant, use PAS. Same savings rate and portfolio as above (albeit with cheaper funds [EDIT - and with low/no AUM fees, versus potentially significant ones that might be charged by Ed Jones]).

But I think for many, if they weren't with Ed Jones, the alternative would not be 2, but rather

3) Don't get around to saving. Or save maybe 5%, sometimes.

or

4) Use another high cost advisor

or

5) Stick the money in the bank, buy CDs at 1-2%

or

6) Buy gold and silver! Or Bitcoin!

or

7) Pick whichever hot stocks(s) are recommended at the water cooler. Panic sell to 100% cash when a 2008 comes around. Circa 2014, cautiously tiptoe back into the market, in a modest way.

or

8) Some other cockamamie investment plan

Are there better ways to invest than Ed Jones? Sure. But there are a lot of worse ways*, too...

* Actually, how good a particular "way" to invest in depends a lot on an individual's particular circumstances. But I'm talking generally, here...
Last edited by psteinx on Thu Jun 07, 2018 12:38 pm, edited 1 time in total.

ccieemeritus
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Re: Why Edward Jones?

Post by ccieemeritus » Fri Jan 05, 2018 8:59 pm

Financial paperwork is complicated. DD just inherited two IRA's from my Mom. She also has a Roth IRA and a taxable account (formerly custodial account) I set up for her. DD also has her bank account and a 401k at work. Six accounts (2 with RMD's) for a 21 year old! They are currently spread across 4 institutions.

I'm helping her roll over the inherited IRAs to Schwab (so all of her investment accounts will be at Schwab).

I'm sure she could struggle through the paperwork. But she just started her first full time job. "Working 40 hours a week makes you a different type of tired" she reports. Her job is during business hours so it's hard for her to get help. The rollover and distribution forms are intimidating. So I help with paperwork.

It it wasn't for me, she'd be a good candidate for a financial advisor. She'd probably find the advisor most "convenient" and "let them handle it". Or she'd leave everything as-is and unmanaged until she starts getting ominous warnings about RMD's. I'd hope she'd end up at Edelman Financial rather than Edward Jones. Edelman charges a fee, but I don't think they invest your money in commission-based garbage (or am I wrong?--I don't know firsthand).

nkotbbh
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Re: Why Edward Jones?

Post by nkotbbh » Sat Jan 06, 2018 12:41 am

CABob wrote:
Thu Jan 04, 2018 4:16 pm
There seems to be a large number of post on this forum that go something like, “I’ve had an account with Full Service Broker for some time and realize that I might save some money buy going to another broker such as Fidguard.” The post generally goes on about the number of funds (or stocks), the expenses, fees, etc. and the responders help with information and suggestions. It seems that the Full Service Broker mentioned is very often Edward Jones and I am wondering why? EJ seems to have a different business model than most other brokers. They frequently have small offices located in malls, shopping centers, etc. while the big names usually have very impressive, somewhat intimidating, standalone buildings with the company name on a sign out front. The EJ brokers are often more involved in the communities they serve and in some cases go door to door introducing themselves soliciting business. I suspect the many of the big name brokers are more inclined to solicit business at the country club, networking groups, etc.
If this is true are the EJ brokers more apt to gain younger inexperienced clients that only realize the situation after they have been with them for a while?
Thoughts?
I am going to tell you the same thing that I have told others when it comes to Edward Jones RUN!!! I was with them worst thing ever always in the negative along with their high fees and cost it is NOT worth it! not until I moved to Vanguard did I sale and saw everything rise after, also on a side note the Edward Jones adviser "salesman" comes out with this book marker looking thing that said at what I am paying a month this is what I will have by retirement age...... no one can predict the market and tell you what you will have so many months/years down the line.

malabargold
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Re: Why Edward Jones?

Post by malabargold » Sat Jan 06, 2018 1:44 am

It boils down to added value.

If these companies could add net value, we would
all be beating down their doors, happy to pay any
layer of fees long as there was net added value.

They can’t, so we aren’t.

In what other avenue of life does one ever hire help
and not expect that party to act in their best interest?

sketchy9
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Re: Why Edward Jones?

Post by sketchy9 » Sat Jan 06, 2018 12:37 pm

Jayhawk11 wrote:
Fri Jan 05, 2018 3:28 pm
My Mom uses Edward Jones, in spite of my exhortations. Why does she do it? Because, like many Americans, money/saving/retirement are scary and don't come easy. She thinks if she gives money to a "professional" every month, she is being taken care of and doesn't have to "worry" about her finances. The person is in town, friendly, and easy to reach. Plus, she doesn't have to take ownership of market losses.

And you know what? Even though EJ sucks, my Mom probably has saved a lot more for retirement with them than without them, because she wouldn't be doing it on her own. Logging into Vanguard and transferring money into funds is "too complicated."
A colleague and I were discussing investing a while back and he asked me how I handled it. I explained (briefly) the DIY philosophy and how simple and straightforward it is. He replied by referencing his non-working spouse and special-needs child and that "he couldn't afford to take a chance," hence his use of EJ. I think a lot of people feel similarly, that by paying a professional to manage investments, they are somewhat insulated from downside risk, or that the professional will safely guide them through tough times, or that the professional has some special knowledge that we mere mortals can never hope to possess. It's totally irrational, as we would all agree, but it's a valuable psychological crutch that many people need.

dbr
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Re: Why Edward Jones?

Post by dbr » Sat Jan 06, 2018 1:01 pm

sketchy9 wrote:
Sat Jan 06, 2018 12:37 pm
Jayhawk11 wrote:
Fri Jan 05, 2018 3:28 pm
My Mom uses Edward Jones, in spite of my exhortations. Why does she do it? Because, like many Americans, money/saving/retirement are scary and don't come easy. She thinks if she gives money to a "professional" every month, she is being taken care of and doesn't have to "worry" about her finances. The person is in town, friendly, and easy to reach. Plus, she doesn't have to take ownership of market losses.

And you know what? Even though EJ sucks, my Mom probably has saved a lot more for retirement with them than without them, because she wouldn't be doing it on her own. Logging into Vanguard and transferring money into funds is "too complicated."
A colleague and I were discussing investing a while back and he asked me how I handled it. I explained (briefly) the DIY philosophy and how simple and straightforward it is. He replied by referencing his non-working spouse and special-needs child and that "he couldn't afford to take a chance," hence his use of EJ. I think a lot of people feel similarly, that by paying a professional to manage investments, they are somewhat insulated from downside risk, or that the professional will safely guide them through tough times, or that the professional has some special knowledge that we mere mortals can never hope to possess. It's totally irrational, as we would all agree, but it's a valuable psychological crutch that many people need.
While we should be aware that the individual investor might do something really ill advised at great cost to himself and his family and that EJ might somehow not do something that bad, the tragedy is that EJ right now is as great a threat to this family's welfare as anything else is.

middleagedlady
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Re: Why Edward Jones?

Post by middleagedlady » Thu May 24, 2018 8:24 pm

EJ advisors can’t be generalized just like other firms. Each advisor is their own person. I don’t fit into any category mentioned above - and I don’t have sales as a background. I left one career for another and just came here to read about the DIY to see if they were anything like me before I decided to make a career of it. There are EJ advisors I’d never do business with, but others I would. It’s really about the relationship and I understand DIYers have no need, but dang some of the comments overgeneralize. I hope I’m professional and not “professional.”

I guess I asked for it to read this one ;)

I would like to know what the added value needs to be? Isn’t value subjective?

texasdiver
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Re: Why Edward Jones?

Post by texasdiver » Thu May 24, 2018 8:50 pm

middleagedlady wrote:
Thu May 24, 2018 8:24 pm
EJ advisors can’t be generalized just like other firms. Each advisor is their own person. I don’t fit into any category mentioned above - and I don’t have sales as a background. I left one career for another and just came here to read about the DIY to see if they were anything like me before I decided to make a career of it. There are EJ advisors I’d never do business with, but others I would. It’s really about the relationship and I understand DIYers have no need, but dang some of the comments overgeneralize. I hope I’m professional and not “professional.”

I guess I asked for it to read this one ;)

I would like to know what the added value needs to be? Isn’t value subjective?
Of course they can all be generalized to the extent that they are all selling the same product. Just like McDonald's servers can be generalized. You go to McDonalds, you're going to order off the menu. You aren't going to get filet mignon or pad thai no matter how good the server is.

middleagedlady
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Re: Why Edward Jones?

Post by middleagedlady » Thu May 24, 2018 11:07 pm

Sometimes I don’t sell. If I give a second opinion and I think they look good, I’m not going to lie. Of course, with my ethics I my not make it 😂😂... but at least I’ll keep my medical license to fall back on I suppose. Perhaps I’m a bit naive to think there are some good financial planners in the world.

The McDonalds comparison really shows a lack of depth don’t you think? You cannot generalize.

texasdiver
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Re: Why Edward Jones?

Post by texasdiver » Thu May 24, 2018 11:18 pm

middleagedlady wrote:
Thu May 24, 2018 11:07 pm
Sometimes I don’t sell. If I give a second opinion and I think they look good, I’m not going to lie. Of course, with my ethics I my not make it 😂😂... but at least I’ll keep my medical license to fall back on I suppose. Perhaps I’m a bit naive to think there are some good financial planners in the world.

The McDonalds comparison really shows a lack of depth don’t you think? You cannot generalize.
Can you sell me no-load index funds from Vanguard or Fidelity or any other low-cost provider to create ANY of the portfolios promoted here on this forum?

DippityDoo
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Re: Why Edward Jones?

Post by DippityDoo » Thu May 24, 2018 11:31 pm

middleagedlady wrote:
Thu May 24, 2018 11:07 pm
Sometimes I don’t sell. If I give a second opinion and I think they look good, I’m not going to lie. Of course, with my ethics I my not make it 😂😂... but at least I’ll keep my medical license to fall back on I suppose. Perhaps I’m a bit naive to think there are some good financial planners in the world.

The McDonalds comparison really shows a lack of depth don’t you think? You cannot generalize.
You laugh to tears that you may be in a situation beneath your ethical standards and then fault another member for "lack of depth?"

2comma
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Re: Why Edward Jones?

Post by 2comma » Fri May 25, 2018 12:03 am

middleagedlady wrote:
Thu May 24, 2018 8:24 pm
EJ advisors can’t be generalized just like other firms. Each advisor is their own person. I don’t fit into any category mentioned above - and I don’t have sales as a background. I left one career for another and just came here to read about the DIY to see if they were anything like me before I decided to make a career of it. There are EJ advisors I’d never do business with, but others I would. It’s really about the relationship and I understand DIYers have no need, but dang some of the comments overgeneralize. I hope I’m professional and not “professional.”

I guess I asked for it to read this one ;)

I would like to know what the added value needs to be? Isn’t value subjective?
When you add the fees and lost opportunity due to not investing those fees for any reasonable amount of savings over a long investment horizon it is easy to specifically generalize that EJ is not good for the average investor. Sure, if you set the bar low enough (no knowledge, lazy, many mistakes) you can make a case but when you subtract hundreds of thousands of dollars less due to fees over a life time compared to a decent BH investor, come on!

Value added? I'll tell you. Set me up with low cost broad market mutual funds without loads or additional fees or churning (there is no more value). Then start coaching us to create a will and planning for inheritances, help us decide when best to start SS, decide if I should do Roth conversions, help us decide how to plan for the survivor, help with medicare decisions, what about LTC and CCRC decisions, taxes, when to retire... How much of this are to giving to your clients?
If I am stupid I will pay.

RadAudit
Posts: 3095
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Location: Second star on the right and straight on 'til morning

Re: Why Edward Jones?

Post by RadAudit » Fri May 25, 2018 7:24 am

middleagedlady wrote:
Thu May 24, 2018 11:07 pm
Perhaps I’m a bit naive to think there are some good financial planners in the world.
There are. There has to be some. Best wishes in your search to find one or to be one.

If I were guessing, the (gross margin x volume) / sale equation for a small FA may push one in to higher cost products. In order to go toward lower gross margins - and offer lower cost products and more FA, you'd need more volume than a small shop can offer and the owner needs to eat. I'd guess that would force a change in the business model to on-line sales / blogs and / or books.
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The calvary isn't coming, kids. You are on your own.

bsteiner
Posts: 3606
Joined: Sat Oct 20, 2012 9:39 pm
Location: NYC/NJ/FL

Re: Why Edward Jones?

Post by bsteiner » Fri May 25, 2018 7:37 am

2comma wrote:
Fri May 25, 2018 12:03 am
... start coaching us to create a will and planning for inheritances, help us decide when best to start SS, decide if I should do Roth conversions, help us decide how to plan for the survivor, help with medicare decisions, what about LTC and CCRC decisions, taxes, when to retire... How much of this are to giving to your clients?
How many stockbrokers are able to do these things?

dbr
Posts: 27207
Joined: Sun Mar 04, 2007 9:50 am

Re: Why Edward Jones?

Post by dbr » Fri May 25, 2018 7:44 am

bsteiner wrote:
Fri May 25, 2018 7:37 am
2comma wrote:
Fri May 25, 2018 12:03 am
... start coaching us to create a will and planning for inheritances, help us decide when best to start SS, decide if I should do Roth conversions, help us decide how to plan for the survivor, help with medicare decisions, what about LTC and CCRC decisions, taxes, when to retire... How much of this are to giving to your clients?
How many stockbrokers are able to do these things?
Exactly, of the "advisors" that are ethical and helpful the fraction that do all these things has to be effectively nil. Is there anyone who actually has someone who provides all this financial service or is an adviser who does and is willing to post his name. I would guess if you are wealthy enough you could employ a financial assistant to do this sort of thing. I am guessing the salary would be on the order of $100k/year plus benefits. There are people whose family wealth is large enough to be run as a business including all personal affairs.

bsteiner
Posts: 3606
Joined: Sat Oct 20, 2012 9:39 pm
Location: NYC/NJ/FL

Re: Why Edward Jones?

Post by bsteiner » Fri May 25, 2018 1:59 pm

dbr wrote:
Fri May 25, 2018 7:44 am
bsteiner wrote:
Fri May 25, 2018 7:37 am
2comma wrote:
Fri May 25, 2018 12:03 am
... start coaching us to create a will and planning for inheritances, help us decide when best to start SS, decide if I should do Roth conversions, help us decide how to plan for the survivor, help with medicare decisions, what about LTC and CCRC decisions, taxes, when to retire... How much of this are to giving to your clients?
How many stockbrokers are able to do these things?
Exactly, of the "advisors" that are ethical and helpful the fraction that do all these things has to be effectively nil. Is there anyone who actually has someone who provides all this financial service or is an adviser who does and is willing to post his name. I would guess if you are wealthy enough you could employ a financial assistant to do this sort of thing. I am guessing the salary would be on the order of $100k/year plus benefits. There are people whose family wealth is large enough to be run as a business including all personal affairs.
Some families indeed do have family offices. But the salary for this would be substantially more than $100,000.

alex_686
Posts: 4063
Joined: Mon Feb 09, 2015 2:39 pm

Re: Why Edward Jones?

Post by alex_686 » Fri May 25, 2018 2:10 pm

bsteiner wrote:
Fri May 25, 2018 1:59 pm
Some families indeed do have family offices. But the salary for this would be substantially more than $100,000.
Maybe.

First, the value of a FA at a place at EJ is not portfolio construction. It is about planning, taxes, estate questions, addressing soft and psychological issues such as risk tolerance and not selling during a downturn.

Second, family offices usually is headed by a partner or principle who has a long list of degrees. Wage would be 100+. For every partner there are 2 to 3 mid level employees why might have college degrees, possible in fine arts or communications. They don't earn 100k.

middleagedlady
Posts: 3
Joined: Thu May 24, 2018 8:14 pm

Re: Why Edward Jones?

Post by middleagedlady » Fri May 25, 2018 9:11 pm

bsteiner wrote:
Fri May 25, 2018 7:37 am
2comma wrote:
Fri May 25, 2018 12:03 am
... start coaching us to create a will and planning for inheritances, help us decide when best to start SS, decide if I should do Roth conversions, help us decide how to plan for the survivor, help with medicare decisions, what about LTC and CCRC decisions, taxes, when to retire... How much of this are to giving to your clients?
How many stockbrokers are able to do these things?
I do those things. It’s all part of the financial plan. But every advisor is different within this company and I’ve seen it.

But thank you for this insight. I really was asking it seriously and you helped me. Healthcare background makes LTC and insurance planning organically a part of my process. SS is nearly always discussed and different scenarios and outcomes. The fiduciary rule is making things confusing for me - why would they get rid of it? I think since I’m in a position of coming from a career where I was able to save a lot and be ready for retirement early If I wanted, I have less external pressures on conflict of interest. Internally I won’t tolerate it. But the more I read the more I wonder about ethics and all of that in this living. We shall see..

KSActuary
Posts: 379
Joined: Fri Jan 13, 2012 10:53 pm

Re: Why Edward Jones?

Post by KSActuary » Sat May 26, 2018 10:06 am

Most FA's have become just asset gatherers. They have become relationship managers and have left the asset management to technology which is not a bad thing for many investors. Financial planning can be different based on family wealth and facts at the time of retirement. Once the basic financial planning is intact, the primary reason to have any FA is invest the money as agreed upon and then update financial plan.

There is no reason for an FA to force their investment philosophy on a client. The financial plan and resulting investment strategy can be discussed between FA and client and a low cost index plan can be implemented.

Too many FAs want their investment philosophy used to make it easy on them which may not be appropriate for the client.

User avatar
CABob
Posts: 4627
Joined: Sun Feb 25, 2007 8:55 pm
Location: Southern California

Re: Why Edward Jones?

Post by CABob » Sat May 26, 2018 10:14 am

middleagedlady wrote:
Fri May 25, 2018 9:11 pm
bsteiner wrote:
Fri May 25, 2018 7:37 am
2comma wrote:
Fri May 25, 2018 12:03 am
... start coaching us to create a will and planning for inheritances, help us decide when best to start SS, decide if I should do Roth conversions, help us decide how to plan for the survivor, help with medicare decisions, what about LTC and CCRC decisions, taxes, when to retire... How much of this are to giving to your clients?
How many stockbrokers are able to do these things?
I do those things. It’s all part of the financial plan. But every advisor is different within this company and I’ve seen it.
It sounds as if middleagedlady is a bit different than the "typical" EJ broker which is a good thing. Was this part of the EJ training or something you did on your own?
Bob

Gadget
Posts: 186
Joined: Fri Mar 17, 2017 1:38 pm

Re: Why Edward Jones?

Post by Gadget » Sat May 26, 2018 11:19 am

I'm not sure on the why Edward Jones question. But I think this site explains the why not pretty well.

http://kronstantinople.blogspot.com/p/e ... -saga.html

harvestbook
Posts: 533
Joined: Sat Mar 18, 2017 7:12 pm

Re: Why Edward Jones?

Post by harvestbook » Sat May 26, 2018 11:59 am

Our small town has two EJ advisors. They run a regular column in the local paper, too (I imagine it's a corporate-issued generic column they put their faces to). The copy makes them sound imminently reasonable and conservative ("Invest for the long haul, slow and steady, etc.") Between that and the personal touch, that's how I got suckered in.

That said, there are a lot worse ways to do things, such as not investing at all.
I'm not smart enough to know, and I can't afford to guess.

MrPotatoHead
Posts: 429
Joined: Sat Oct 14, 2017 10:41 pm

Re: Why Edward Jones?

Post by MrPotatoHead » Sat May 26, 2018 5:31 pm

Why Edward Jones?

So Bernie Madoff can look good.

bsteiner
Posts: 3606
Joined: Sat Oct 20, 2012 9:39 pm
Location: NYC/NJ/FL

Re: Why Edward Jones?

Post by bsteiner » Sat May 26, 2018 9:43 pm

middleagedlady wrote:
Fri May 25, 2018 9:11 pm
bsteiner wrote:
Fri May 25, 2018 7:37 am
2comma wrote:
Fri May 25, 2018 12:03 am
... start coaching us to create a will and planning for inheritances, help us decide when best to start SS, decide if I should do Roth conversions, help us decide how to plan for the survivor, help with medicare decisions, what about LTC and CCRC decisions, taxes, when to retire... How much of this are to giving to your clients?
How many stockbrokers are able to do these things?
I do those things. It’s all part of the financial plan. But every advisor is different within this company and I’ve seen it.

But thank you for this insight. I really was asking it seriously and you helped me. Healthcare background makes LTC and insurance planning organically a part of my process. SS is nearly always discussed and different scenarios and outcomes. The fiduciary rule is making things confusing for me - why would they get rid of it? I think since I’m in a position of coming from a career where I was able to save a lot and be ready for retirement early If I wanted, I have less external pressures on conflict of interest. Internally I won’t tolerate it. But the more I read the more I wonder about ethics and all of that in this living. We shall see..
Wills and estate planning -- any team member, accountant, stockbroker, financial planner, insurance agent, etc., can be the catalyst.

Social security is relatively straightforward where no spouse benefits are involved, such as someone who was never married, or whose spouse is a CSRS Federal employee. If there are spouse benefits involved, it can be complicated.

Roth conversions still aren't well understood. Interestingly, stockbrokers and financial planners seem to understand it better than accountants. I have another article on this coming out in the June 2018 issue of Trusts & Estates: http://www.wealthmanagement.com/retirem ... 2d78c71780, which may help.

Long-term care -- most policies cover short-term care (for example, the first 3 years) but not long-tern care. Since many people will need care for a few years, that's much like prepaying an expense. I would like to see a policy that covers an unlimited amount of time, but doesn't pay for the first 3 years. I'm not aware of any such policies.

fujiters
Posts: 136
Joined: Tue Mar 06, 2018 2:17 pm

Re: Why Edward Jones?

Post by fujiters » Sun May 27, 2018 7:59 am

Gadget wrote:
Sat May 26, 2018 11:19 am
I'm not sure on the why Edward Jones question. But I think this site explains the why not pretty well.

http://kronstantinople.blogspot.com/p/e ... -saga.html
That was a great read.

It's really disheartening. The high fees seem to be necessary in order to maintain the type of service the clients expect. If you want a personal relationship with the person managing your portfolio in the low to mid 6 figures, this is the cost.

I don't think it's as nefarious as this board makes it out to be though. A lot of people are really uncomfortable managing their investments, and would probably stick their money into CDs if not for their reassuring EJ-type advisor. In these cases, they're still coming out ahead of the "stick it all in CDs with the local bank" scenario. Similar people hire others to fill out their 1040EZs. It seems nuts to us, and it's painful to watch when it's our otherwise competent parents/friends/etc, but we need to keep in mind that the EJ clients probably weren't about to put in a limit order for VTI before the EJ guy knocked on their door.

Edit: upon further consideration, it is every bit as nefarious as it's made out to be. It should be a legal requirement that all fees are prominently disclosed on every financial statement.
Last edited by fujiters on Sun May 27, 2018 4:49 pm, edited 1 time in total.
“The purpose of the margin of safety is to render the forecast unnecessary.” -Benjamin Graham

dbr
Posts: 27207
Joined: Sun Mar 04, 2007 9:50 am

Re: Why Edward Jones?

Post by dbr » Sun May 27, 2018 8:18 am

fujiters wrote:
Sun May 27, 2018 7:59 am
Gadget wrote:
Sat May 26, 2018 11:19 am
I'm not sure on the why Edward Jones question. But I think this site explains the why not pretty well.

http://kronstantinople.blogspot.com/p/e ... -saga.html
That was a great read.

It's really disheartening. The high fees seem to be necessary in order to maintain the type of service the clients expect. If you want a personal relationship with the person managing your portfolio in the low to mid 6 figures, this is the cost.

I don't think it's as nefarious as this board makes it out to be though. A lot of people are really uncomfortable managing their investments, and would probably stick their money into CDs if not for their reassuring EJ-type advisor. In these cases, they're still coming out ahead of the "stick it all in CDs with the local bank" scenario. Similar people hire others to fill out their 1040EZs. It seems nuts to us, and it's painful to watch when it's our otherwise competent parents/friends/etc, but we need to keep in mind that the EJ clients probably weren't about to put in a limit order for VTI before the EJ guy knocked on their door.
My point of view is that investors can't afford pay to what advisors need to charge to stay in business. That is not necessarily novel as it applies also to such things as carrying a balance on a credit card or taking out a loan to buy a car. Maybe it even applies to student loans.

However, there is the egregious compared to the marginally tolerable.

I'm not sure the comments about better off with EJ than without should be credited as this falls rather in the category of "your money or your life." If this behavior were recognized in law for the crime it should be the situation would be quite different.

cherijoh
Posts: 4994
Joined: Tue Feb 20, 2007 4:49 pm
Location: Charlotte NC

Re: Why Edward Jones?

Post by cherijoh » Sun May 27, 2018 9:02 am

renue74 wrote:
Thu Jan 04, 2018 4:53 pm
This blog post explains EJ the best I've ever read. I actually found it here on this forum:

http://kronstantinople.blogspot.com/p/e ... -saga.html

On a side note, recently in my Nextdoor neighborhood site, someone posted a request for a FA. It's amazing how many local one man, independent shops there are in my small 60K population town....all fighting for the same portfolios.

As an experiment, I laid out a very thoughtful argument of why most folks could save a lot of money by managing their money themselves. I shared the Boglehead website, details about active funds not beating the market over the long haul, the visible AND hidden expenses of using a FA and the EJ link above. It was easily a 500 word Nextdoor post. :)

It got no traction. :oops:
I am a single, recently-retired female and have many single/divorced/widowed friends. Every single one of them (except for me) has a financial adviser - although I don't know if any use EJ. I have tried to explain to them the benefits of DIY, but it has definitely fallen on deaf ears. (They also all have their taxes professionally prepared even though they are limited to doing a 1040 plus schedules A & B). These ladies are otherwise very frugal, so I can only conclude that they are willing to pay for "peace of mind". The only problem is that I don't think any of them realize how much they are actually paying!

dbr
Posts: 27207
Joined: Sun Mar 04, 2007 9:50 am

Re: Why Edward Jones?

Post by dbr » Sun May 27, 2018 9:13 am

cherijoh wrote:
Sun May 27, 2018 9:02 am
renue74 wrote:
Thu Jan 04, 2018 4:53 pm
This blog post explains EJ the best I've ever read. I actually found it here on this forum:

http://kronstantinople.blogspot.com/p/e ... -saga.html

On a side note, recently in my Nextdoor neighborhood site, someone posted a request for a FA. It's amazing how many local one man, independent shops there are in my small 60K population town....all fighting for the same portfolios.

As an experiment, I laid out a very thoughtful argument of why most folks could save a lot of money by managing their money themselves. I shared the Boglehead website, details about active funds not beating the market over the long haul, the visible AND hidden expenses of using a FA and the EJ link above. It was easily a 500 word Nextdoor post. :)

It got no traction. :oops:
I am a single, recently-retired female and have many single/divorced/widowed friends. Every single one of them (except for me) has a financial adviser - although I don't know if any use EJ. I have tried to explain to them the benefits of DIY, but it has definitely fallen on deaf ears. (They also all have their taxes professionally prepared even though they are limited to doing a 1040 plus schedules A & B). These ladies are otherwise very frugal, so I can only conclude that they are willing to pay for "peace of mind". The only problem is that I don't think any of them realize how much they are actually paying!
The idea that a person

1) who appears to be a member of a qualified profession
2) the services of such professions which are normally cost justified

is actually

1) a shameless salesman
2) an incompetent
3) even a crook
4) but at best a purveyor of overpriced goods that can better be obtained elsewhere

is nearly impossible to absorb.

Financial advising is the only business I can think of where this is true. The others are either legitimately worth the cost or immediately recognizable for the shams they are. The situation is aided and abetted by people being unwilling to learn things and having willingly chosen to accept self incompetence at critical thinking and anything involving arithmetic and quantitative reasoning.

Actin
Posts: 14
Joined: Wed May 16, 2018 8:40 pm

Re: Why Edward Jones?

Post by Actin » Sun May 27, 2018 10:14 am

The fees for all these financial advisors are just ridiculous, and no personal service they give you can make up for the amount you're going to overpay over the course of an investing lifetime. I don't care if they offer tax and will services or free muffins in the lobby, I can get those way cheaper elsewhere.

I also have a big problem with any service where the provider of a service has a direct conflict of interest with my goals. This is lying to the customer, no matter how you slice it. They have to steer you to high fees and inefficient investments, just to give you the illusion that you have a "professional" managing your money.

This isn't a knock at EJ specifically, it's virtually all of these advisor services. They're like travel agents, a relic of the past that is made obsolete by the internet.

Investing is not that difficult, and the internet has made it so that you have nearly unlimited resources at your disposal to educate yourself. There really isn't any excuse other than laziness. I get that grandma doesn't know how to use a computer, and simply refuses to learn, but this is the kind of attitude that makes you pay "stupid tax". You really won't learn how to make a Vanguard/Fidelity account in order to save 100k+, really? Being a smart consumer is probably one of the easiest ways to maximize your ROI on your money.

EJ fees are bad, but they're still not as bad as those Ramsey ELPs that charge 5% front end load.

keepingitsimple
Posts: 153
Joined: Sun Mar 18, 2018 8:20 pm

Re: Why Edward Jones?

Post by keepingitsimple » Sun May 27, 2018 10:26 am

Actin wrote:
Sun May 27, 2018 10:14 am

EJ fees are bad, but they're still not as bad as those Ramsey ELPs that charge 5% front end load.
They are equally bad. EJ sells funds with a 5% front end load too. And their equity commissions are extremely high.
https://www.edwardjones.com/images/ETY-1714E-A-MA.pdf

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