What Are the Actual Fees and Fee Types at Edward Jones?

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bigtex
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What Are the Actual Fees and Fee Types at Edward Jones?

Post by bigtex »

Don't worry I am not looking to ever move money to Edward Jones, but I want to know their fees so I can advise others against it with actual figures.

First off, what is the annual account fee? Is it at least 1.00% of assets no matter if you hold their mutual funds, cash, or anything?

Second, Their american funds all have the front end sales loads of 5% or so right? Third, the funds also have annual expense ratios of roughly 1% right?

Third, what miscellaneous fees do they have such as stock commissions, account closing fee, transfer fees, etc? Does anyone know roughly the amounts for these? I know they like to churn accounts, buying and selling holdings to create additional fees.

For fun, what would be the absolute cheapest % fee to do business with Edward Jones? Something like etfs or index funds that you never sell I suppose. But you would still pay their AUM fee correct?

Thanks for any help you all can provide!
suemarkp
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Re: What Are the Actual Fees and Fee Types at Edward Jones?

Post by suemarkp »

bigtex wrote: Thu Mar 07, 2019 2:23 pm Don't worry I am not looking to ever move money to Edward Jones, but I want to know their fees so I can advise others against it with actual figures.
First off, what is the annual account fee? Is it at least 1.00% of assets no matter if you hold their mutual funds, cash, or anything?
There are at least 2 account types at Edward Jones: Legacy and Guided Solutions. The Legacy has a $10 yearly account fee. Guided SOlutions I think is zero. The Legacy has no AUM fee, but typically has funds with front end loads. Guided Solutions has a 1.3% AUM fee which drops somewhat as you get to $500K or more I think (but only on the money above that threshold). You get some choice of funds with the Guided Solutions account. First you identify risk (I said I want high risk tolerance/all equities) and then some funds seem mandatory. I have some Vanguard funds in my Guided Solutions account. But the mother ship seems to want to bucketize between growth, income, international, cash and they rebalance at their whim. They seem to want 2 funds for each function. They are always changing funds or proportions, but it doesn't cost me anything as far as I can see when they trade in and out of funds. If there are 12b-1 fees, they hide them well. You'd hope not with a 1.3% AUM...

I have a Guided Solutions Roth with them and my wife has a Legacy tIRA and Roth. I don't think you can open a Legacy account, that is only for older existing accounts. I'm not sure what their options are for a taxable account. I'm not going to do it there, so I don't know if it is a similar setup as guided solutions (just a separate account) or if there are more choices.
bigtex wrote: Thu Mar 07, 2019 2:23 pm Second, Their american funds all have the front end sales loads of 5% or so right? Third, the funds also have annual expense ratios of roughly 1% right?
In my wife's Legacy account, it was full of class A (font end loaded) American Funds (5.75% load). They have sales charges in that Legacy account so I said don't touch it and just let it sit. None of my Guided Solutions funds have loads, but the ER's range from .3 to .8% (and the Vanguard ER is the same as elsewhere, but they don't seem to favor rebalancing into that one...).
bigtex wrote: Thu Mar 07, 2019 2:23 pm Third, what miscellaneous fees do they have such as stock commissions, account closing fee, transfer fees, etc? Does anyone know roughly the amounts for these? I know they like to churn accounts, buying and selling holdings to create additional fees.
I'm not sure. WHen people tell you they had a fee it is important to know if it was Legacy or Guided Solutions. The Guided Solutions type seems to have less fees because of the high AUM fee. I've not transferred anything out or bought individual stocks or CDs through them.
bigtex wrote: Thu Mar 07, 2019 2:23 pm For fun, what would be the absolute cheapest % fee to do business with Edward Jones? Something like etfs or index funds that you never sell I suppose. But you would still pay their AUM fee correct?
You don't get to pick much in most accounts, they will choose for you but they do have some choices available to make you feel like you're involved. Perhaps in a taxable account they will let you buy only what you want. If you go Guided Solutions, you'll be paying that AUM on everything they manage.
Mark | Kent, WA
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Re: What Are the Actual Fees and Fee Types at Edward Jones?

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Re: What Are the Actual Fees and Fee Types at Edward Jones?

Post by prairieman »

Besides those fees there are intangible other costs associated with, for example, the higher costs of (or more time) doing your taxes. This was true for us when we inherited an EJ account. I had to do final taxes for the deceased and then inherited the headache the next two years before transferring to Vanguard and selling the crazy long and varied list of smaller assets. I found an old receipt from the previous year where the deceased was charged $800 by a cpa for having her taxes done.
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Re: What Are the Actual Fees and Fee Types at Edward Jones?

Post by Dottie57 »

These threads make me so happy I use Fidelity index funds - 3 fund portfolio.
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bigtex
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Re: What Are the Actual Fees and Fee Types at Edward Jones?

Post by bigtex »

Is guided solutions just for retirement accounts?
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Re: What Are the Actual Fees and Fee Types at Edward Jones?

Post by marcopolo »

suemarkp wrote: Thu Mar 07, 2019 5:31 pm
bigtex wrote: Thu Mar 07, 2019 2:23 pm Don't worry I am not looking to ever move money to Edward Jones, but I want to know their fees so I can advise others against it with actual figures.
First off, what is the annual account fee? Is it at least 1.00% of assets no matter if you hold their mutual funds, cash, or anything?
There are at least 2 account types at Edward Jones: Legacy and Guided Solutions. The Legacy has a $10 yearly account fee. Guided SOlutions I think is zero. The Legacy has no AUM fee, but typically has funds with front end loads. Guided Solutions has a 1.3% AUM fee which drops somewhat as you get to $500K or more I think (but only on the money above that threshold). You get some choice of funds with the Guided Solutions account. First you identify risk (I said I want high risk tolerance/all equities) and then some funds seem mandatory. I have some Vanguard funds in my Guided Solutions account. But the mother ship seems to want to bucketize between growth, income, international, cash and they rebalance at their whim. They seem to want 2 funds for each function. They are always changing funds or proportions, but it doesn't cost me anything as far as I can see when they trade in and out of funds. If there are 12b-1 fees, they hide them well. You'd hope not with a 1.3% AUM...

I have a Guided Solutions Roth with them and my wife has a Legacy tIRA and Roth. I don't think you can open a Legacy account, that is only for older existing accounts. I'm not sure what their options are for a taxable account. I'm not going to do it there, so I don't know if it is a similar setup as guided solutions (just a separate account) or if there are more choices.
bigtex wrote: Thu Mar 07, 2019 2:23 pm Second, Their american funds all have the front end sales loads of 5% or so right? Third, the funds also have annual expense ratios of roughly 1% right?
In my wife's Legacy account, it was full of class A (font end loaded) American Funds (5.75% load). They have sales charges in that Legacy account so I said don't touch it and just let it sit. None of my Guided Solutions funds have loads, but the ER's range from .3 to .8% (and the Vanguard ER is the same as elsewhere, but they don't seem to favor rebalancing into that one...).
bigtex wrote: Thu Mar 07, 2019 2:23 pm Third, what miscellaneous fees do they have such as stock commissions, account closing fee, transfer fees, etc? Does anyone know roughly the amounts for these? I know they like to churn accounts, buying and selling holdings to create additional fees.
I'm not sure. WHen people tell you they had a fee it is important to know if it was Legacy or Guided Solutions. The Guided Solutions type seems to have less fees because of the high AUM fee. I've not transferred anything out or bought individual stocks or CDs through them.
bigtex wrote: Thu Mar 07, 2019 2:23 pm For fun, what would be the absolute cheapest % fee to do business with Edward Jones? Something like etfs or index funds that you never sell I suppose. But you would still pay their AUM fee correct?
You don't get to pick much in most accounts, they will choose for you but they do have some choices available to make you feel like you're involved. Perhaps in a taxable account they will let you buy only what you want. If you go Guided Solutions, you'll be paying that AUM on everything they manage.
Thanks for sharing your details.

You seem to have a pretty good grasp on what you are paying for their services.
From many of the threads i have read here, it seemed EJ mostly catered to people that had no clue what their services were costing them.
I would be interested in your informed opinion on their value propositions.
Do you feel like you are getting your money's worth for the fees you are paying them?
What services are they providing that you feel are worth those costs?
Once in a while you get shown the light, in the strangest of places if you look at it right.
suemarkp
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Re: What Are the Actual Fees and Fee Types at Edward Jones?

Post by suemarkp »

My wife, while she was divorced, started saving for retirement via Edward Jones. After we got married, I did my first back door Roth with them (that's what created my Guided Solutions account) to better understand what they have and at the same time stumbled onto this site.The only reason I keep using them was to compare their advice to what I think I should do based on what I have learned here. She likes the sales guy and that's also a problem. I think she trusts me, but I'm trying to have a Vanguard aggressive portfolio and an EJ aggressive Portfolio so we can compare returns between mine and EJ. In general, the EJ performance has been good. But we haven't experienced a big drop like 2008, so we're only comparing in good times. If I graph her American Funds growth fund against the Vanguard VIGAX growth fund, they are very similar in end results even though the ER is higher in the AF fund.

EJ does a yearly review (they come to the house) and said we can live to 95 with our current planned assets and retirement plan. I can see the funds he picks and the costs and the balance. My wife doesn't want to learn the details and just want someone to mange things. She was ready to quit work and asked the EJ guy how that would affect things. He said you'd have to die at 94 instead. What he didn't know was that her pension will be reduced by $400/month from the number I told him if she quits now. So they don't really know all your details and how things work even though they seem to think they do (good salesman again). I also think part of the yearly review is reconnaissance to learn what else they can convince you to move into EJ managed accounts.

The quandry for me is what to do if I die. Most of our retirement is in pensions and company 401Ks. Some is in Vanguard (taxable). I manage everything. Our combined assets at EJ are about $60K (less than 5% of retirement funds). I don't want it to go over $100K. The yearly visit and peace of mind she gets is worth the fees up to that threshold. I need to wait a few more years until I retire to convert her EJ IRA to a Roth. Once our combined EJ Roths go over $100K, I think I'm going to open a Vanguard Roth and transfer my company Roth 401K into it and excess EJ Roth into it. Based on how that goes and the cost, I'll either keep the EJ (up to 100K) or close it out. I'd like to kill it.

My biggest gripe with EJ is not having control of what I want to do and the AUM fee. They blame the fund allocation on the "fiduciary rules" like they are acting in my best interest. If I want only 10% in international, or little in income or all in growth,I can't do that (the mothership complains that a rebalance is required).
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Emiliania
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Re: What Are the Actual Fees and Fee Types at Edward Jones?

Post by Emiliania »

I'm so glad to see this thread! It has suddenly become a point of interest for me, as I have just become the family member assigned to watching over our elderly relative's financial matters. So, today, we set down with his Edward Jones account, and I got a look at it. I will by no means be looking to convince my family that the account should be moved. But, I want to understand how much and by what methods EJ is extracting money from my relative, so I can keep a watch out that it doesn't somehow get worse.

On the monthly statements I see a fee that looks like the ~1% AUM fee. Aren't there other fees? Are the fees associated with each of the >dozen funds hidden in their slightly lower growth? I can look those funds up on Morningstar and see expense ratios typically around 0.4%, but then is that what he is paying on his particular Class of each fund? (He has Guided Solutions.)

Thanks for any help... This feels like forensic personal finance...
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Re: What Are the Actual Fees and Fee Types at Edward Jones?

Post by Lalamimi »

hi. We escaped from EJ last November. The advisor fee is a percentage, guessing the 1% you are seeing, billed quarterly I recall. Then, every fund has its own fee, as you can find on Morning Star. Then, we discovered there were loaded funds, where we paid to BUY the fund. And some have a fee if you sell. They are all bad. I created a spreadsheet when we determined to move to Fidelity. I was shocked. My husband and I both had IRAs there, some for over 20 yrs. What a waste of our money. When I asked our advisor about the fees, he just said here is what you have paid. He NEVER mentioned all the funds' fees. If you can access their funds online, it might be easier. Good luck.
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Re: What Are the Actual Fees and Fee Types at Edward Jones?

Post by bogivan »

Emiliania wrote: Thu Sep 10, 2020 8:59 pm I'm so glad to see this thread! It has suddenly become a point of interest for me, as I have just become the family member assigned to watching over our elderly relative's financial matters. So, today, we set down with his Edward Jones account, and I got a look at it. I will by no means be looking to convince my family that the account should be moved. But, I want to understand how much and by what methods EJ is extracting money from my relative, so I can keep a watch out that it doesn't somehow get worse.
Good job on not only taking on the finances, but also making sure you're understanding what your relative is paying.

One thing to check and watch for carefully is churn: extracting profit by swapping money between different loaded funds so that the "one time" front/end loads fees keep repeatedly being applied. Compare statements month-to-month and year-by-year to see if the funds or allocations are changing and whether those funds are loaded or not.
Emiliania wrote: Thu Sep 10, 2020 8:59 pm On the monthly statements I see a fee that looks like the ~1% AUM fee. Aren't there other fees? Are the fees associated with each of the >dozen funds hidden in their slightly lower growth? I can look those funds up on Morningstar and see expense ratios typically around 0.4%, but then is that what he is paying on his particular Class of each fund? (He has Guided Solutions.)
Morningstar should be able to pull up most classes of each fund if you have the ticker or add the class code to the end of your search ("American funds growth R6"). Otherwise, you might need to find the individual fund's prospectus from the fund family's website: there is usually a table (or multiple tables) towards the front of the document that lists the classes and corresponding fees. You're going to want to add up front/redemption loads and pay attention to stuff like the 12b-1 fees.
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Re: What Are the Actual Fees and Fee Types at Edward Jones?

Post by John Z »

FYI
Here is a 54 page pdf from EJ entitled Understanding How We Are Compensated for Financial Services. I've had it for a year or two and it isn't dated so don't know how accurate it is for today. But it'll show you they have everything covered for fees and then some.

Understanding How We Are Compensated for Financial Services
https://www.edwardjones.com/images/LGL-8944-A_Final.pdf
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Re: What Are the Actual Fees and Fee Types at Edward Jones?

Post by MittensMoney »

Their disclosures are atrocious. Check this out: https://www.edwardjones.com/images/doll ... raging.pdf If an advisor talks you into DCA'ing a lump sum, they're taking 2% of that amount... and they're potentially earning payouts on the mutual funds bought at the same time.
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Re: What Are the Actual Fees and Fee Types at Edward Jones?

Post by John Z »

Yes, very atrocious. That is just page 33 of the 54 pages. If you have an account you'd have to scan most of these pages and then add up all the fees associated to what assets you have and what financial-related activity you are performing.
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Re: What Are the Actual Fees and Fee Types at Edward Jones?

Post by suemarkp »

A Guided Solutions account should not have funds with loads. You are paying the AUM fee, an annual account fee of $40 for the 1st IRA and $20 for additional ones under the same name, and the Expense Ratios of the funds selected. The 12B-1 kickback to Edward Jones comes out of the Expense Ratio. ERs of 0.4 isn't bad for EJ. Compare the return of the EJ selected funds to what you would have otherwise chosen by using Portfolio Visualizer or one of the money sites with a graphing function showing one fund against another. Sometimes they aren't so bad, some are quite bad. But rarely are two funds exactly the same. That is, the make up of the Vanguard Growth Fund is not exactly the same as the American Funds Growth Fund of America. So of course the returns won't be the same as one has more International than the other, or more mid caps, and of course a higher expense ratio which may or may not make up for their management actions.

Older (Select) accounts will have loaded funds, but they won't have the AUM fee. If you have those, you don't want to churn them, as it will cost you the load. Churning a Guided Solutions account isn't a problem as long as its a tax deferred account.

If you stay with Edward Jones, they won't let you buy a total stock market fund. They think it is too large... But you can buy an S&P 500 fund, a mid cap fund, and a small cap fund. They probably feel the same about total bond too. In Guided Solutions, you will have even less control than this, as the mothership has Growth, Growth/Income, Income, International, Fixed balancing rules to stay within in Guided Solutions.
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Post by Bogle7 »

Dottie57 wrote: Thu Mar 07, 2019 6:55 pm These threads make me so happy I use Fidelity index funds - 3 fund portfolio.
+1
suemarkp
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Re: What Are the Actual Fees and Fee Types at Edward Jones?

Post by suemarkp »

John Z wrote: Fri Sep 11, 2020 1:39 pm Yes, very atrocious. That is just page 33 of the 54 pages. If you have an account you'd have to scan most of these pages and then add up all the fees associated to what assets you have and what financial-related activity you are performing.
You have to watch the wording as stocks are not mutual funds, and funds in some things (e.g. brokerage account) don't affect things in others (IRA accounts). They have a lot of transaction fees for individual stocks. Don't buy stocks at EJ, stick with mutual funds or ETFs (but those too tend to have high ERs in which a portion is kicked back to EJ). Many fees are waived in the AUM IRA accounts though.

Best thing, don't start there in the first place if you don't have to. If you are already there, understand what type(s) of accounts you have and what the applicable fees are and do what you can to minimize them. Weigh the benefit of their service to the fees you pay, and consider leaving if it isn't worth it (but that costs money too...)
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Re: What Are the Actual Fees and Fee Types at Edward Jones?

Post by Stinky »

John Z wrote: Fri Sep 11, 2020 1:39 pm Yes, very atrocious. That is just page 33 of the 54 pages. If you have an account you'd have to scan most of these pages and then add up all the fees associated to what assets you have and what financial-related activity you are performing.
Life is too short for me to plow through 54 pages of disclosures to see that I’m getting ripped off.

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Re: What Are the Actual Fees and Fee Types at Edward Jones?

Post by Emiliania »

I would like to summarize what I have learned about the fees my relative is paying at Edward Jones, in the hope that it will help others.

They are in "Guided Solutions".
The AUM fee is around 1.3%, and this fee is clearly shown on the monthly statements.
The assets are held in 16 different funds to make a "Balanced Growth and Income". (American New Perspective F3, MFS Intl Diversification R6, Franklin Dynatech R6, American Wash Mutual Inv F3, Inesco Equity and Income R6, American Wash Mutual Inv F3, etc.) Most are actively managed funds, just a few are indices. The weighted average of the annual fees are 0.41%. (Some of that money is sent to EJ.)

None of the funds have front-end loads. (I hadn't realized at first, but when Morningstar puts a dash under the "front load", it doesn't necessarily mean that the load is 0, it means the load changes by share class. It does look like for the shares used in "Guided Solutions", there are no front loads.)

So, they are paying about 1.7%. For an account with a million dollars, that would be $17,000 a year.

For the same asset allocation, they could simply use Vanguard's Life Strategy Conservative Growth, with an annual fee of 0.12%, which would cost them $1,200 a year. I really, really, doubt those actively managed funds get a 1.6% higher return to make up for those fees. And I haven't heard anything that implies they are getting ~$10k worth of advice or hand-holding from that agent. (But, well, family stuff, so I'm not likely to try to push on them the idea of getting out of EJ.)
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Re: What Are the Actual Fees and Fee Types at Edward Jones?

Post by smitcat »

suemarkp wrote: Fri Sep 11, 2020 1:55 pm
John Z wrote: Fri Sep 11, 2020 1:39 pm Yes, very atrocious. That is just page 33 of the 54 pages. If you have an account you'd have to scan most of these pages and then add up all the fees associated to what assets you have and what financial-related activity you are performing.
You have to watch the wording as stocks are not mutual funds, and funds in some things (e.g. brokerage account) don't affect things in others (IRA accounts). They have a lot of transaction fees for individual stocks. Don't buy stocks at EJ, stick with mutual funds or ETFs (but those too tend to have high ERs in which a portion is kicked back to EJ). Many fees are waived in the AUM IRA accounts though.

Best thing, don't start there in the first place if you don't have to. If you are already there, understand what type(s) of accounts you have and what the applicable fees are and do what you can to minimize them. Weigh the benefit of their service to the fees you pay, and consider leaving if it isn't worth it (but that costs money too...)
"Weigh the benefit of their service to the fees you pay, and consider leaving if it isn't worth it (but that costs money too...)"
And that is what our relatives learned the hard way when they left EJ - selling fees along with taxes as a result of needing to sell assetts for transfer.
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Re: What Are the Actual Fees and Fee Types at Edward Jones?

Post by suemarkp »

Emiliania wrote: Mon Sep 14, 2020 7:59 pm I really, really, doubt those actively managed funds get a 1.6% higher return to make up for those fees. And I haven't heard anything that implies they are getting ~$10k worth of advice or hand-holding from that agent. (But, well, family stuff, so I'm not likely to try to push on them the idea of getting out of EJ.)
You can easily compare the two portfolios using Portfolio Visualizer (the free version) to find out. It takes a bit of time to type in all the tickers, and you can choose how far back you want to compare. If you go back too far, you'll find the funds didn't exist more than a few years ago, but Portfolio Visualizer suggests a predecessor fund to use in the comparison instead. So watch for that if you are going back 5 to 10 years or more and change the tickers to their suggestion.

Another difficulty in comparing approaches is that when EJ swaps your fund for a different one, you need to run separate portfolio visualizer segments to capture the change since the same fund wasn't held for a long time. This is more work and perhaps one of the reasons they churn funds (hide the long term history). You can do a 3 year comparison and see that maybe the EJ fund was 2% worse than Life Strategy. But they'll say, that's only 2% over 3 years - not really that much money and in the noise of a 25% return. But if you extend it out for 10 or 20 years, that loss compounds. Or maybe you'll find you are about even or even ahead some of the time. Depends on the funds and I did not run them through for you.

Some of the active funds do rather well, and some not. The hardest thing in the comparison is to determine if Life Strategy Conservative Growth really has the same asset allocation as the EJ portfolio. Portfolio Visualizer will tell you, and if they are really close then the return results are telling. If there are differences, especially if one has more international than the other, then it isn't really a fair comparison. Conversely, if you went to EJ and said I want my funds to match the returns (after fees) and asset allocation of Life Strategy Conservative Growth (which EJ probably won't buy for you), and what they give you doesn't live up to it, then you have even more reason to leave. But that type of customer doesn't tend to show up at EJ.
Mark | Kent, WA
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