Why Edward Jones?

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bsteiner
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Re: Why Edward Jones?

Post by bsteiner » Sun May 27, 2018 11:02 am

cherijoh wrote:
Sun May 27, 2018 9:02 am
...
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 two are very different. While preparing a tax return consisting of only the Form 1040 and Schedules A and B isn't very difficult, the cost of having H&R Block or even an accountant at a small accounting firm prepare it is very small compared to the cost of having someone "manage" your assets.

Creditcardguy
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Re: Why Edward Jones?

Post by Creditcardguy » Wed Jun 06, 2018 6:53 pm

I had a meeting with my Edward Jones guy today. I told him I was thinking about self managing my money via Vanguard index funds. I'll just frankly share the conversation.

He was ready for me, as I called him Monday and scheduled the meeting. He pulled up numerous funds, within my American Funds, that beat the index going back 20 years, AFTER EJ fees were deducted. If we go back 10 years the index funds win, but he says with interest rates rising, and for the last year or so, American Funds/Guilded Solutions are ahead again. For example, the index funds are up 3% or so YTD but my IRA's are up over 6.

Guided solutions is the new term for the funds they offer as the government has required them to no longer have funds with commission, apparently. So Guided Solutions are all 1.08% (some EJ advisors charge up to 1.35%, which is the max they allow). American Funds are less but those are grandfathered in, can't get them any longer. Several of those had total fees of .64 and .77 including EJ fees, as an example.

The EJ theory is that even though EJ has extra costs (because your accounts are actively managed), the net return over time is greater than the index funds, even after all fees are considered. This is the main point he was trying to emphasize. How can I tell if this is true or not??

He showed where during the plunge of 2008/2009, American Funds took much less of a beating than the index, although both recovered of course.

Somebody please set me straight, as I'm very new and learning. Thanks.

ThrustVectoring
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Re: Why Edward Jones?

Post by ThrustVectoring » Wed Jun 06, 2018 6:58 pm

Creditcardguy wrote:
Wed Jun 06, 2018 6:53 pm
He was ready for me, as I called him Monday and scheduled the meeting. He pulled up numerous funds, within my American Funds, that beat the index going back 20 years, AFTER EJ fees were deducted. If we go back 10 years the index funds win, but he says with interest rates rising, and for the last year or so, American Funds/Guilded Solutions are ahead again. For example, the index funds are up 3% or so YTD but my IRA's are up over 6.
It's pretty straightforward to get funds that have outperformed for no reason other than pure luck. Just close out underperforming funds and promote the ones that happen to overperform. It's the very common trick in video editing, too - just show people the stuff that worked, cut the stuff that didn't.

For a much fairer comparison, the predictions of overperformance need to be made in advance. This is what happened with Warren Buffett's famous bet about indexing vs hedge funds. Index funds won :D

FOGU
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Re: Why Edward Jones?

Post by FOGU » Wed Jun 06, 2018 10:36 pm

ccieemeritus wrote:
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).
That's what we Dads are for, right? Teach our kids what they need to know to protect themselves and prosper. So hopefully "help with the paperwork" doesn't mean doing it for her, but rather teaching her how to do it and teaching her all the other important lessons that the opportunity presents. Hopefully by being there, as a Dad should, you will help her avoid the Edward Joneses of the world. Good job, Dad.
~ Don't just do something. Sit there. ~

MathWizard
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Re: Why Edward Jones?

Post by MathWizard » Wed Jun 06, 2018 10:47 pm

psteinx wrote:
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).

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...

I think that this is exactly right. I know lots of people who do
3 or 5.
For them,. #4 or EJ would likely be better.
I am DIY on most things because I usually could not afford it.
For me, it was either pick my own stocks, or use a low fee index fund. The latter seemed to be the better approach until I knew enough to do a good job stock picking. I'm now pretty well convinced that I will never stock pick.

MrPotatoHead
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Re: Why Edward Jones?

Post by MrPotatoHead » Wed Jun 06, 2018 10:59 pm

Creditcardguy wrote:
Wed Jun 06, 2018 6:53 pm
I had a meeting with my Edward Jones guy today. I told him I was thinking about self managing my money via Vanguard index funds. I'll just frankly share the conversation.

He was ready for me, as I called him Monday and scheduled the meeting. He pulled up numerous funds, within my American Funds, that beat the index going back 20 years, AFTER EJ fees were deducted. If we go back 10 years the index funds win, but he says with interest rates rising, and for the last year or so, American Funds/Guilded Solutions are ahead again. For example, the index funds are up 3% or so YTD but my IRA's are up over 6.

Guided solutions is the new term for the funds they offer as the government has required them to no longer have funds with commission, apparently. So Guided Solutions are all 1.08% (some EJ advisors charge up to 1.35%, which is the max they allow). American Funds are less but those are grandfathered in, can't get them any longer. Several of those had total fees of .64 and .77 including EJ fees, as an example.

The EJ theory is that even though EJ has extra costs (because your accounts are actively managed), the net return over time is greater than the index funds, even after all fees are considered. This is the main point he was trying to emphasize. How can I tell if this is true or not??

He showed where during the plunge of 2008/2009, American Funds took much less of a beating than the index, although both recovered of course.

Somebody please set me straight, as I'm very new and learning. Thanks.
This is awesome news. Tell him since he so sure of his and Edward Jones investment prowess that he should be willing to give you a written personal guarantee for 10 thousand dollars to be paid to you within 30 days if the EJ portfolio fails to beat(after expenses) the total return of ITOT (after expenses) after 5 years. If EJ wins he has been paid via the expense ratio, if the index prevails you are somewhat compensated for your losses.

Feel free to alter the amount you are to be paid, the duration, and the benchmark as you see fit. I am willing to bet you will have no need to hire a lawyer to draft the guarantee(technically not needed).

psteinx
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Re: Why Edward Jones?

Post by psteinx » Thu Jun 07, 2018 12:55 pm

As a clarification/follow up to my post upthread - the higher costs of using EJ are potentially, not only higher cost funds, but also, AUM or similar fees that may be charged.

That said, I don't think it's unreasonable to think that for at least some EJ clients, they'll come out ahead of what approaches they might have used if they had stayed DIY.

CnC
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Re: Why Edward Jones?

Post by CnC » Thu Jun 07, 2018 1:09 pm

Creditcardguy wrote:
Wed Jun 06, 2018 6:53 pm
I had a meeting with my Edward Jones guy today. I told him I was thinking about self managing my money via Vanguard index funds. I'll just frankly share the conversation.

He was ready for me, as I called him Monday and scheduled the meeting. He pulled up numerous funds, within my American Funds, that beat the index going back 20 years, AFTER EJ fees were deducted. If we go back 10 years the index funds win, but he says with interest rates rising, and for the last year or so, American Funds/Guilded Solutions are ahead again. For example, the index funds are up 3% or so YTD but my IRA's are up over 6.

Guided solutions is the new term for the funds they offer as the government has required them to no longer have funds with commission, apparently. So Guided Solutions are all 1.08% (some EJ advisors charge up to 1.35%, which is the max they allow). American Funds are less but those are grandfathered in, can't get them any longer. Several of those had total fees of .64 and .77 including EJ fees, as an example.

The EJ theory is that even though EJ has extra costs (because your accounts are actively managed), the net return over time is greater than the index funds, even after all fees are considered. This is the main point he was trying to emphasize. How can I tell if this is true or not??

He showed where during the plunge of 2008/2009, American Funds took much less of a beating than the index, although both recovered of course.

Somebody please set me straight, as I'm very new and learning. Thanks.

You should have scheduled a meeting with me instead.

I would have told you even with my 25% per hear fee if you would have just invested all your money in Amazon Netflix and Bitcoin you would have beaten the sp500 by a landslide.
:mrgreen:


If you are honestly concerned you can do what my dad did and split your money. It's not the best, but better to be half right than all the way wrong.

I don't think Edward Jones is a good deal or that they look out for you in any way. But transfer 25-50% out to a vanguard self managed account. Buy the same % tsm and tbm as you are currently holding in your Edward Jones account telling your agent that he may be right. Just to keep your options open. Check the accounts once a year and after enough years of one beating the other close the looser and put the rest in to the winner.


American Funds are actually pretty good funds and I really think that they give the index funds a run for their money. But I find it hard to believe that they can beat the index after their er and the Edward Jones wrapper. (usually Ed Jones doesn't include their fees in the charts)

Also you can always buy American funds in your self managed account without the Ed Jones fee wrapper.
NPFFX

bsteiner
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Re: Why Edward Jones?

Post by bsteiner » Thu Jun 07, 2018 2:26 pm

Creditcardguy wrote:
Wed Jun 06, 2018 6:53 pm
I had a meeting with my Edward Jones guy today. ...

He pulled up numerous funds, within my American Funds, that beat the index going back 20 years, AFTER EJ fees were deducted. ...
You can have American Funds without Edward Jones in the middle. If you invest at least $1 million, you won't pay the load. Depending on the funds you select, you'll pay about 0.6% a year in expenses, some of which (I think 0.25% a year) American Funds pays to the advisor.

While there are less costly ways to invest and have an advisor (for example, Vanguard at 0.3% plus the costs of the funds), there are lots of more costly ways to invest than American Funds.

mptfan
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Re: Why Edward Jones?

Post by mptfan » Thu Jun 07, 2018 2:51 pm

Actin wrote:
Sun May 27, 2018 10:14 am
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.
Yes, but many people, probably most people, do not have the interest or the inclination or the aptitude to learn how to invest on their own. Most people just don't care that much and don't want to learn. Whether that should be true or not doesn't matter because it is true.

There are lots of things that I *could* learn to do for myself but I choose not to, like doing my own auto mechanical work, or my own electrical or plumbing or air conditioning work at home. Sure, I could learn how to do those things, and I'm sure I would save many thousands of dollars over the course of my life, but I am not interested and I just don't care enough to take the effort...I rather pay for professionals to do the work. Do you call that laziness? I guess you could, but I think it's rational laziness. Most people think that way about investing.
Last edited by mptfan on Thu Jun 07, 2018 3:10 pm, edited 1 time in total.

nimo956
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Re: Why Edward Jones?

Post by nimo956 » Thu Jun 07, 2018 2:59 pm

I don't understand how the AUM business model came into existence, or why people put up with it. For what other service do you pay a portion of your life savings each and every year? Advice does not scale with the size of your portfolio.
50% VTI / 50% VXUS

CnC
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Re: Why Edward Jones?

Post by CnC » Thu Jun 07, 2018 3:11 pm

nimo956 wrote:
Thu Jun 07, 2018 2:59 pm
I don't understand how the AUM business model came into existence, or why people put up with it. For what other service do you pay a portion of your life savings each and every year? Advice does not scale with the size of your portfolio.
It's actually a brilliant model.

You get in while the advise you recieve is "cheap" assuming the advise is good the price creeps up, but since you are doing well you do not notice the increases in cost. Ultimately they either end up with a whale or when they begin making too much the person bails.

But here is the kicker, by that point the portfolio is so large and has taken so long to amass the owner is terrified of screwing up and losing it all. After all 1 simple mistake could end up costing the entire yearly fee of the advisor. Thus the account owner is paralyzed they know they're paying too much but are too afraid to do anything about.

alex_686
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Re: Why Edward Jones?

Post by alex_686 » Thu Jun 07, 2018 4:06 pm

nimo956 wrote:
Thu Jun 07, 2018 2:59 pm
I don't understand how the AUM business model came into existence, or why people put up with it. For what other service do you pay a portion of your life savings each and every year? Advice does not scale with the size of your portfolio.
The older model is the brokerage model, where the adviser gets a cut of commission. There the broker has an incentive to put in too many trades for you - to churn your account.

AUM does a better job of aligning your interest with the advisor. Not prefect, but better.

frugalecon
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Re: Why Edward Jones?

Post by frugalecon » Thu Jun 07, 2018 5:05 pm

alex_686 wrote:
Thu Jun 07, 2018 4:06 pm
nimo956 wrote:
Thu Jun 07, 2018 2:59 pm
I don't understand how the AUM business model came into existence, or why people put up with it. For what other service do you pay a portion of your life savings each and every year? Advice does not scale with the size of your portfolio.
The older model is the brokerage model, where the adviser gets a cut of commission. There the broker has an incentive to put in too many trades for you - to churn your account.

AUM does a better job of aligning your interest with the advisor. Not prefect, but better.
But still so expensive. If I paid a 1% AUM fee, it would equal about 12% of my gross salary this year!

Miriam2
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Re: Why Edward Jones?

Post by Miriam2 » Thu Jun 07, 2018 5:30 pm

ccieemeritus wrote: 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.
LOL - sounds like my kids, "a different type of tired" and "you mean I have to look at more paperwork when I'm off work?" and "isn't there more to life than this?" I just hope they have absorbed enough from husband and me that, when we are gone, they won't feel the need to call up EJ to help them with their retirement accounts.

At my son's work, a Morgan Stanley financial advisor made the rounds and asked him where he kept his investments. My son replied, "At Vanguard." The Morgan Stanley guy made a face, "Oooh, you settle for just average."

frugalecon
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Re: Why Edward Jones?

Post by frugalecon » Thu Jun 07, 2018 6:02 pm

Miriam2 wrote:
Thu Jun 07, 2018 5:30 pm
ccieemeritus wrote: 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.
LOL - sounds like my kids, "a different type of tired" and "you mean I have to look at more paperwork when I'm off work?" and "isn't there more to life than this?" I just hope they have absorbed enough from husband and me that, when we are gone, they won't feel the need to call up EJ to help them with their retirement accounts.

At my son's work, a Morgan Stanley financial advisor made the rounds and asked him where he kept his investments. My son replied, "At Vanguard." The Morgan Stanley guy made a face, "Oooh, you settle for just average."
If I had been your son, I would have been tempted to reply, “Safe from the likes of you!”

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CABob
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Re: Why Edward Jones?

Post by CABob » Thu Jun 07, 2018 6:36 pm

ccieemeritus wrote:
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.I
She sounds like a good candidate for putting it all (well perhaps not the taxable) into a target retirement or life cycle fund, establish automated RMDs and ignore it for a few years.
Bob

ccieemeritus
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Re: Why Edward Jones?

Post by ccieemeritus » Fri Jun 08, 2018 10:35 pm

CABob wrote:
Thu Jun 07, 2018 6:36 pm
ccieemeritus wrote:
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.I
She sounds like a good candidate for putting it all (well perhaps not the taxable) into a target retirement or life cycle fund, establish automated RMDs and ignore it for a few years.
Thanks for the suggestion of automated RMDs. I didn’t know there was such a thing. Exactly what she needs.

Yes when I’m done “helping” the portfolio will be simple enough that even a college graduate can understand it. :-)

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baw703916
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Re: Why Edward Jones?

Post by baw703916 » Fri Jun 08, 2018 10:51 pm

livesoft wrote:
Thu Jan 04, 2018 4:24 pm
It is also possible the the EJ person also is the pastor of the church.
So, it's not really a load, but rather a tithe? :P
Most of my posts assume no behavioral errors.

cautious
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Re: Why Edward Jones?

Post by cautious » Sat Jun 09, 2018 12:53 pm

The small offices embedded in the community among familiar shops are very convenient for the elderly or homemakers who can check on their finances while shopping, and get information from a friendly figure.

My 92 year old neighbor did that and I realized the extra expense was worth that social contact. There may be hidden costs but the trade off was a feeling of financial competence. She was proud of being in touch with her broker and monitoring her legacy. The extra fees were a good investment in her feeling of worth. I didn't offer any advice. Her kids might blow the money anyway. In any case they will get the house and CDs and whatever else he sold her.

bberris
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Re: Why Edward Jones?

Post by bberris » Sat Jun 09, 2018 5:47 pm

alex_686 wrote:
Thu Jun 07, 2018 4:06 pm
nimo956 wrote:
Thu Jun 07, 2018 2:59 pm
I don't understand how the AUM business model came into existence, or why people put up with it. For what other service do you pay a portion of your life savings each and every year? Advice does not scale with the size of your portfolio.
The older model is the brokerage model, where the adviser gets a cut of commission. There the broker has an incentive to put in too many trades for you - to churn your account.

AUM does a better job of aligning your interest with the advisor. Not prefect, but better.
AUM grew out of the end of fixed, high, commissions. When commissions were fixed and high, you just opened a brokerage account (there were no IRAs, or 401ks). Then your broker called with "ideas" to get you to trade. The business model had to change with 5-7 $ commissions.

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dratkinson
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Re: Why Edward Jones?

Post by dratkinson » Sat Jun 09, 2018 6:14 pm

frugalecon wrote:
Thu Jun 07, 2018 6:02 pm
Miriam2 wrote:
Thu Jun 07, 2018 5:30 pm
...
At my son's work, a Morgan Stanley financial advisor made the rounds and asked him where he kept his investments. My son replied, "At Vanguard." The Morgan Stanley guy made a face, "Oooh, you settle for just average."
If I had been your son, I would have been tempted to reply, “Safe from the likes of you!”
I was thinking, "No, I'm getting the guaranteed market return less a minuscule fee, which is a higher return than that of the average active investor."

But combining the two would also work.



I was watching the home of an elderly neighbor before her death (bring in the mail, take care of the pet and plants). I'd open business envelopes and contact her friends if something needed attending too. This is how I discovered that her FA (not EJ) was churning her IRA to effectively double his >1% fee.

When he didn't stop churning after being told to (churning evident on next monthly statement), her friends helped her move her IRA to Fidelity. As a parting shot, the FA reported the IRA rollover as a complete disbursement. Which resulted in a letter from the state demanding their share in taxes.

Her friends contacted a CPA to successfully resolve the state tax issue. Prior to this, she didn't need a CPA because her "...FA was taking care of her."
Last edited by dratkinson on Sat Jun 09, 2018 6:29 pm, edited 1 time in total.
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AlphaLess
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Re: Why Edward Jones?

Post by AlphaLess » Sat Jun 09, 2018 6:20 pm

bloom2708 wrote:
Thu Jan 04, 2018 4:30 pm
Even the name Edward Jones is not threatening. They are everywhere. Strip malls. Neighborhood shopping centers. They do a great job marketing.
Yup. Just watch "The Founder", especially one of the last scenes.
It's about having the name, "McDonalds".
https://www.youtube.com/watch?v=VBIxg3XiBaw

Ah, man, how I *LOVE* *LOVE* movies like this one.
This is what all USA is about!
"You can get more with a kind word and a gun than with just a kind word." George Washington

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Re: Why Edward Jones?

Post by AlphaLess » Sat Jun 09, 2018 6:24 pm

baw703916 wrote:
Fri Jun 08, 2018 10:51 pm
livesoft wrote:
Thu Jan 04, 2018 4:24 pm
It is also possible the the EJ person also is the pastor of the church.
So, it's not really a load, but rather a tithe? :P
Good point.
Not only taking their money, but also their soul.
"You can get more with a kind word and a gun than with just a kind word." George Washington

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oldcomputerguy
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Re: Why Edward Jones?

Post by oldcomputerguy » Sat Jun 09, 2018 6:25 pm

dratkinson wrote:
Sat Jun 09, 2018 6:14 pm
frugalecon wrote:
Thu Jun 07, 2018 6:02 pm
Miriam2 wrote:
Thu Jun 07, 2018 5:30 pm
...
At my son's work, a Morgan Stanley financial advisor made the rounds and asked him where he kept his investments. My son replied, "At Vanguard." The Morgan Stanley guy made a face, "Oooh, you settle for just average."
If I had been your son, I would have been tempted to reply, “Safe from the likes of you!”
I was thinking, "No, I'm getting the guaranteed market return less a minuscule fee, which is a higher return than that of the average active investor."

But combining the two would also work.
Or...

“I’m guaranteed my fair share of what the market gives. What guarantees are you willing to put on paper?”
It’s taken me a lot of years, but I’ve come around to this: If you’re dumb, surround yourself with smart people. And if you’re smart, surround yourself with smart people who disagree with you.

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dratkinson
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Re: Why Edward Jones?

Post by dratkinson » Sat Jun 09, 2018 8:00 pm

middleagedlady wrote:
Fri May 25, 2018 9:11 pm
... 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..
Respectfully disagree. As an EJ employee, your #1 responsibility is to produce for EJ. The success of your clients is of secondary importance.

Here is a test you should perform. Are you allowed to put your clients into no-load low-cost funds? Are they allowed to stay in no-load low-cost funds without being encouraged to trade? If not then you are externally pressured to do what is best for EJ, not for your clients. It is a condition of your employment.


And should you resist, in an attempt to do what is best for your clients and jump ship, EJ has been known to pursue departing employees.
See: http://www.google.com/search?q=edward+j ... ining+cost
See: http://www.google.com/search?q=advisor+ ... ward+jones

You are forewarned.



I met an EJ FA at my front door and he seems like a nice guy. He said he'd do a good job managing my money. I said "...no thanks, I'm good." He wanted to know what I was doing.

I told him I managed my money based on the work of multiple economics Nobel Laureates. And as a trained FA, he should know them so asked him to name one and cite the work that is pertinent to individual investors. He couldn't do it. (If he'd been able to name one, I'd have asked him how he reconciled the Nobel Laureate's work with the EJ fee structure.)

I learned a long time ago that nice guys/gals looking for your money are to be avoided.
d.r.a, not dr.a. | I'm a novice investor, you are forewarned.

AlphaLess
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Re: Why Edward Jones?

Post by AlphaLess » Sat Jun 09, 2018 8:04 pm

I don't see why we, as investors, need to be even acknowledging the EJ 'advisors'.

Or any other ones, for that matter.

Metaphorically, when they come to knock at your door, throw some rotten eggs from your second floor window on their polished suits.
Also, warn all their neighbors that they are blood-sucking vultures.
They won't be back.
"You can get more with a kind word and a gun than with just a kind word." George Washington

wolf359
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Re: Why Edward Jones?

Post by wolf359 » Thu Sep 27, 2018 10:43 pm

Actin wrote:
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.

Holy cow, have you tried looking up the Edward Jones current commission schedule for individual stocks?

Purchase Range Commission Maximum
to $5,999.99 2.50% $150.00
$6,000.00 to $9,999.99 2.00% + $30.00 $230.00
$10,000.00 to $24,999.99 1.50% + $80.00 $455.00
$25,000.00 to $99,999.99 1.00% + $205.00 $1,205.00
$100,000.00 and above 0.50% + $705.00 Unlimited

Source: https://www.edwardjones.com/images/ETY-1714E-A-MA.pdf

Perkunas
Posts: 137
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Re: Why Edward Jones?

Post by Perkunas » Fri Sep 28, 2018 9:37 am

I live in a small town (< 10k people) within a rural county (< 70k people). We have at least 8 EJ offices (4 of them are in my town, specifically, since we are the hub of the county). People use EJ because they are accessible. You can drive by their office, you can talk to someone face-to-face, and they'll remember to send you a birthday note.

My employer uses EJ for our Simple IRA. I literally just talked to my EJ advisor this morning - she even answered the phone herself (rather than her assistant) - and she spent 25 minutes talking to me without any appointment scheduled. That is an example of why people use/like EJ.

My Simple IRA is divided between 13 mutual funds, with a weighted-average expense ratio of 0.58%. The EJ "program fees" are approximately 1.2%/yr (paid monthly). To a Boglehead, this information is an example of why we despise EJ. But these number mean very little to the average investor.

It will be difficult for me to transfer my Simple to Fidelity, because my EJ advisor is a client of the firm I work for. That is part of the blessing and curse of EJ. It feels much more difficult to leave when you know you're going to run into your ex-advisor at the grocery store or church or wherever.

bgf
Posts: 610
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Re: Why Edward Jones?

Post by bgf » Fri Sep 28, 2018 9:58 am

Perkunas wrote:
Fri Sep 28, 2018 9:37 am
I live in a small town (< 10k people) within a rural county (< 70k people). We have at least 8 EJ offices (4 of them are in my town, specifically, since we are the hub of the county). People use EJ because they are accessible. You can drive by their office, you can talk to someone face-to-face, and they'll remember to send you a birthday note.

My employer uses EJ for our Simple IRA. I literally just talked to my EJ advisor this morning - she even answered the phone herself (rather than her assistant) - and she spent 25 minutes talking to me without any appointment scheduled. That is an example of why people use/like EJ.

My Simple IRA is divided between 13 mutual funds, with a weighted-average expense ratio of 0.58%. The EJ "program fees" are approximately 1.2%/yr (paid monthly). To a Boglehead, this information is an example of why we despise EJ. But these number mean very little to the average investor.

It will be difficult for me to transfer my Simple to Fidelity, because my EJ advisor is a client of the firm I work for. That is part of the blessing and curse of EJ. It feels much more difficult to leave when you know you're going to run into your ex-advisor at the grocery store or church or wherever.
thats tough. every two or three months i transfer my contributions from my employer's Simple IRA to an old Simple IRA I have with Schwab. This costs me $40 a year in an annual maintenance fee, but its better than having to invest through Stifel (which i dont think is as bad as EJ but still not as good as my self-directed Schwab account).
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"

moehoward
Posts: 177
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Re: Why Edward Jones?

Post by moehoward » Fri Sep 28, 2018 10:14 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 just finished the article, wow. EJ uses the friends and family method for selling, very much like Ameriprise did in the beginning.

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Jazztonight
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Re: Why Edward Jones?

Post by Jazztonight » Fri Sep 28, 2018 11:36 am

Okay, here's something you probably don't know about Edward Jones.

In my recent coast-to-coast walk across the US, I hiked for about a hundred miles on the Katy Trail a "Rails-to-Trails" bicycle and walking path that runs along the Missouri River. It's just wonderful! https://en.wikipedia.org/wiki/Katy_Trail_State_Park

At some point, I saw signage that informed me that a major contributor to the Katy Trail was Edward D. "Ted" Jones, (the son of the founder, Edward D. Jones). Really? I did some research out of curiosity. (This is from Wikipedia):

"Edward David "Ted" Jones, Jr. (December 18, 1925 – October 3, 1990), the son of the founder of Edward Jones Investments, later ran the firm, and built its signature small town brokerage system. He devoted his last years, along with his wife Pat Jones, establishing the Katy Trail State Park and the Prairie Fork Conservation Area in Missouri.

"...In the last 10 years of his life, he donated $2.2 million for Missouri to acquire property along 200 miles of abandoned Missouri–Kansas–Texas Railroad rail tracks to form a bicycle path for the Katy Trail State Park. The planned eastern terminus of the park is the confluence of the Missouri River and Mississippi River. In 2004 the park at the confluence was named Edward "Ted" and Pat Jones-Confluence Point State Park in honor of his wife and him."

While I have no interest in investing with the firm or recommending them, I now view "Ted" and the company through a slightly different filter.
"What does not destroy me, makes me stronger." Nietzsche

Mr.BB
Posts: 593
Joined: Sun May 08, 2016 10:10 am

Re: Why Edward Jones?

Post by Mr.BB » Fri Sep 28, 2018 1:30 pm

AlphaLess wrote:
Sat Jun 09, 2018 8:04 pm
I don't see why we, as investors, need to be even acknowledging the EJ 'advisors'.

Or any other ones, for that matter.

Metaphorically, when they come to knock at your door, throw some rotten eggs from your second floor window on their polished suits.
Also, warn all their neighbors that they are blood-sucking vultures.
They won't be back.
The reason you "acknowledge" the issues with various advisors and their companies is so that other people can be educated and learn. The reason history repeats itself is because people do not learn.
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."

FBN2014
Posts: 444
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Re: Why Edward Jones?

Post by FBN2014 » Sat Sep 29, 2018 12:33 pm

There was a thread about EJ a few months ago also.

viewtopic.php?f=2&t=256810
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain

texasdiver
Posts: 2672
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Location: Vancouver WA

Re: Why Edward Jones?

Post by texasdiver » Sat Sep 29, 2018 10:58 pm

Perkunas wrote:
Fri Sep 28, 2018 9:37 am
I live in a small town (< 10k people) within a rural county (< 70k people). We have at least 8 EJ offices (4 of them are in my town, specifically, since we are the hub of the county). People use EJ because they are accessible. You can drive by their office, you can talk to someone face-to-face, and they'll remember to send you a birthday note.

My employer uses EJ for our Simple IRA. I literally just talked to my EJ advisor this morning - she even answered the phone herself (rather than her assistant) - and she spent 25 minutes talking to me without any appointment scheduled. That is an example of why people use/like EJ.

My Simple IRA is divided between 13 mutual funds, with a weighted-average expense ratio of 0.58%. The EJ "program fees" are approximately 1.2%/yr (paid monthly). To a Boglehead, this information is an example of why we despise EJ. But these number mean very little to the average investor.

It will be difficult for me to transfer my Simple to Fidelity, because my EJ advisor is a client of the firm I work for. That is part of the blessing and curse of EJ. It feels much more difficult to leave when you know you're going to run into your ex-advisor at the grocery store or church or wherever.
Shouldn't be that hard. It's just business not personal. You gotta do what you gotta do. Shrug. If they want to match Fidelity's fee schedule you're happy to keep your money with them. It's not like you are making things personal and waging some private jihad against EJ in your home town.

If they try to make it personal just shrug and say sorry, nothing personal, it's just business that's all.

AlphaLess
Posts: 744
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Re: Why Edward Jones?

Post by AlphaLess » Sun Sep 30, 2018 3:03 pm

Mr.BB wrote:
Fri Sep 28, 2018 1:30 pm
AlphaLess wrote:
Sat Jun 09, 2018 8:04 pm
I don't see why we, as investors, need to be even acknowledging the EJ 'advisors'.

Or any other ones, for that matter.

Metaphorically, when they come to knock at your door, throw some rotten eggs from your second floor window on their polished suits.
Also, warn all their neighbors that they are blood-sucking vultures.
They won't be back.
The reason you "acknowledge" the issues with various advisors and their companies is so that other people can be educated and learn. The reason history repeats itself is because people do not learn.
I get what you are saying, but history never repeats itself.

Also, there is a difference between acknowledging EJ advisors and recognizing that they don't add value (at very high cost).

I prefer this generalization:
- smart people learn from OTHER people's mistakes,
- average people learn from their own mistakes,
- stupid people never learn.
"You can get more with a kind word and a gun than with just a kind word." George Washington

Turbo29
Posts: 170
Joined: Tue May 01, 2018 7:12 am

Re: Why Edward Jones?

Post by Turbo29 » Sun Sep 30, 2018 3:26 pm

Jazztonight wrote:
Fri Sep 28, 2018 11:36 am
Okay, here's something you probably don't know about Edward Jones.

In my recent coast-to-coast walk across the US, I hiked for about a hundred miles on the Katy Trail a "Rails-to-Trails" bicycle and walking path that runs along the Missouri River. It's just wonderful! https://en.wikipedia.org/wiki/Katy_Trail_State_Park

At some point, I saw signage that informed me that a major contributor to the Katy Trail was Edward D. "Ted" Jones, (the son of the founder, Edward D. Jones). Really? I did some research out of curiosity. (This is from Wikipedia):

"Edward David "Ted" Jones, Jr. (December 18, 1925 – October 3, 1990), the son of the founder of Edward Jones Investments, later ran the firm, and built its signature small town brokerage system. He devoted his last years, along with his wife Pat Jones, establishing the Katy Trail State Park and the Prairie Fork Conservation Area in Missouri.

"...In the last 10 years of his life, he donated $2.2 million for Missouri to acquire property along 200 miles of abandoned Missouri–Kansas–Texas Railroad rail tracks to form a bicycle path for the Katy Trail State Park. The planned eastern terminus of the park is the confluence of the Missouri River and Mississippi River. In 2004 the park at the confluence was named Edward "Ted" and Pat Jones-Confluence Point State Park in honor of his wife and him."

While I have no interest in investing with the firm or recommending them, I now view "Ted" and the company through a slightly different filter.
Along similar lines:

Charles Kettering promoted the use of a known poison, tetraethyl lead, in gasoline brushing aside known health issues. The fact that he later founder the Memorial Sloan-Kettering Cancer Center in no way relieves him of that responsibility in my mind.

Mr.BB
Posts: 593
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Re: Why Edward Jones?

Post by Mr.BB » Sun Sep 30, 2018 5:42 pm

AlphaLess wrote:
Sun Sep 30, 2018 3:03 pm
Mr.BB wrote:
Fri Sep 28, 2018 1:30 pm
AlphaLess wrote:
Sat Jun 09, 2018 8:04 pm
I don't see why we, as investors, need to be even acknowledging the EJ 'advisors'.

Or any other ones, for that matter.

Metaphorically, when they come to knock at your door, throw some rotten eggs from your second floor window on their polished suits.
Also, warn all their neighbors that they are blood-sucking vultures.
They won't be back.
The reason you "acknowledge" the issues with various advisors and their companies is so that other people can be educated and learn. The reason history repeats itself is because people do not learn.
I get what you are saying, but history never repeats itself.

Also, there is a difference between acknowledging EJ advisors and recognizing that they don't add value (at very high cost).

I prefer this generalization:
- smart people learn from OTHER people's mistakes,
- average people learn from their own mistakes,
- stupid people never learn.
Of course history repeats itself, that's why we have that saying. For example look at the exuberance of the late 1920's before the crash and the late 1990's exuberance before the crash. I also do like your generalization, though I also think smart people learn from other people mistakes as well as their own.
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."

AlphaLess
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Re: Why Edward Jones?

Post by AlphaLess » Sun Sep 30, 2018 9:06 pm

Mr.BB wrote:
Sun Sep 30, 2018 5:42 pm
Of course history repeats itself, that's why we have that saying. For example look at the exuberance of the late 1920's before the crash and the late 1990's exuberance before the crash. I also do like your generalization, though I also think smart people learn from other people mistakes as well as their own.
Exuberance was the same. Different time, different circumstances.
If history repeated itself, then market timing would have been easy.
Each iteration is different.
"You can get more with a kind word and a gun than with just a kind word." George Washington

FoolMeOnce
Posts: 292
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Re: Why Edward Jones?

Post by FoolMeOnce » Mon Oct 01, 2018 2:31 pm

Creditcardguy wrote:
Wed Jun 06, 2018 6:53 pm
He pulled up numerous funds, within my American Funds, that beat the index going back 20 years, AFTER EJ fees were deducted.
And what about the remainder of your holdings?

mptfan
Posts: 4678
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Re: Why Edward Jones?

Post by mptfan » Mon Oct 01, 2018 3:43 pm

Mr.BB wrote:
Sun Sep 30, 2018 5:42 pm
Of course history repeats itself, that's why we have that saying.
There are actually contradictory sayings...

"History repeats itself" - Unknown

"History does not repeat itself, but it often rhymes." - attributed to Mark Twain

HJG0989
Posts: 155
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Re: Why Edward Jones?

Post by HJG0989 » Thu Oct 04, 2018 9:44 am

A friend who lives in a small town three hours away called me for advice. She needed to roll her 401k over to an IRA and begin taking withdrawals. She told me she had met with Edward Jones but they seemed expensive. I told her to make an appointment with Fido and I would go with her. I was really impressed with the guy she met with. He input her expenses into RIP, input her assets, and told her it looked good. He explained things really well. He was receptive of my suggestion to use a low cost all in one fund. He will set up monthly withdrawals and an ACH into her checking. She is very happy and I am impressed.

This will cost her a fraction of what EJ would have charged and she will go back once a year for a check up.

Fidelity is hit or miss though. I met with a rep to move some accounts from Vanguard. He was nothing but a sleezy salesman, he referred to the Tax Managed PAS product as an index fund amongst other things. He really would have been better suited to work for EJ. I sent a nasty message to the branch manager to have him removed from my account.

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nedsaid
Posts: 10350
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Re: Why Edward Jones?

Post by nedsaid » Thu Oct 04, 2018 12:32 pm

Edward Jones as a firm has a certain "folksiness" about it. Small offices, sometimes in converted houses, are seemingly everywhere. The advisors are nice and friendly and are a member of your Rotary Club. Non-threatening and reassuring. To a senior citizen, who might be a bit lonely and who is overwhelmed by investing, Edward Jones is almost irresistible. Two older family members were and are Edward Jones clients.

The truth is, you are better off with a firm like Fidelity or Vanguard. Trouble is, they are located in often imposing and impressive buildings and it seems intimidating. As far as Fidelity, their nearest office is about 12 miles away downtown. I can throw a rock from where I live, and no matter where I throw it, I will hit an Edward Jones office. Exaggerating a bit but not by much.

I will say that I just did a couple of IRA rollovers from workplace savings plans at Fidelity to a Fidelity IRA account. I thought I had died and gone to investment heaven. Low cost funds and ETFs available for no transaction fee with just one exception, even then the trading cost was $4.95. I just could not believe it. Had I rolled over to Ameriprise or Edward Jones, I would be raked over with fees.

What I will say is that I will trade much lower fees in exchange for "folksiness". Edward Jones wants an Assets Under Management fee of 1.35% a year. Vanguard Personal Advisory service will do it for 0.30% a year and the robots at Fidelity Go will manage your portfolio for 0.35% a year. Seeing that I am self directed, I don't even have to pay an advisory fee.
A fool and his money are good for business.

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