Leaving Edward Jones is there a better or worse time

[riperobgyn]

Just wanted peoples opinion. I have about 800K invested in many many different funds with Edward Jones. Of course my financial advisor is a good friend of mine, and over the years I have wrestled with the decision to leave and move everything to Vanguard. I already have an IRA and a taxable account with Vanguard. For the past several years any new investments have only been with Vanguard. I know I am just throwing money away staying with Edward Jones and I must leave. Question? Does it matter on timing of this switch. My friend has me invested in so many funds that more than likely Vanguard, before transferring, will need to just transfer in cash instead of each fund. I heard this can take 4-6 weeks. Since the pandemic my total portfolio is down about 25% with Edward Jones. I just wanted to know should I, wait till the economy stabilizes, wait till investments return to pre-pandemic levels, or just do it asap. Would this a the ultimate rebalancing act. I would appreciate anyones advice.

Thanks,

James

[unclescrooge]

Why can't you transfer in kind?

[retired@50]

Question? Does it matter on timing of this switch.
...
just do it asap.

I think you've answered your own question. I'd move on it as soon as is practical. I don't think it will take 4-6 weeks. To minimize time out of the market, you could look into a transfer in-kind. This way, the assets that aren't exclusive to EJ will come to Vanguard as is (instead of as cash), then you can pick and choose when to sell them off.

Eliminating any high expense ratio funds will likely be one of the first priorities.

Regards,

[FiveK]

...need to just transfer in cash instead of each fund. I heard this can take 4-6 weeks.

Shouldn't take more that 4-6 days to sell at least some funds at EJ, transfer the money to your checking account, then transfer the money to Vanguard. EJ might have a daily ACH cash transfer limit, but might have a higher wire transfer limit. Might be worth checking so you know for sure.

Since the pandemic my total portfolio is down about 25% with Edward Jones. I just wanted to know should I, wait till the economy stabilizes, wait till investments return to pre-pandemic levels, or just do it asap.

Good question. In "normal" times "do it asap" would definitely be reasonable. A little less definite now, but there's also the chance of a significant market drop while you go to cash. You pays your money and you takes your chance.

[Luckywon]

I would do the following:

Retirement accounts:
Assets that can be transferred in kind: Transfer ASAP
Assets that cannot be transferred in kind: Liquidate and transfer ASAP

Taxable accounts:
Assets that can be transferred in kind: Transfer ASAP
Assets that cannot be transferred in kind that have little to no capital gains: Liquidate and transfer ASAP
Assets that cannot be transferred in kind that have significant capital gains: If you are able to tax loss harvest this year or have capital losses being carried forward that will balance out capital gains from liquidating, I would liquidate and transfer ASAP. If not, consider holding them at EJ in the account with the lowest fees. If in the future they go down in value or you have sufficient capital losses harvested to balance out capital gains from liquidating these, do so.

[Kookaburra]

Oddly enough, EJ is a “friend” to anyone who invests with them.

The best day to leave is yesterday. Today is the next best day.

[gr7070]

Why not move all you EJ assets into EJ funds you will be able to do a in-kind transfer from? Thus the only wait is whatever it takes (1 day?) to make that transfer within EJ and the in-kind transfer.

Make certain you know the costs of buying/selling within EJ. (Edit: I see a few posts down there are significant fees to buy/sell within. Don't do as I suggested.)

What funds does your friend have you in? Are they at least the best EJ options? Curious just how good a friend this is.

[Vanguard Fan 1367]

I would do the following:

Retirement accounts:
Assets that can be transferred in kind: Transfer ASAP
Assets that cannot be transferred in kind: Liquidate and transfer ASAP

Taxable accounts:
Assets that can be transferred in kind: Transfer ASAP
Assets that cannot be transferred in kind that have little to no capital gains: Liquidate and transfer ASAP
Assets that cannot be transferred in kind that have significant capital gains: If you are able to tax loss harvest this year or have capital losses being carried forward that will balance out capital gains from liquidating, I would liquidate and transfer ASAP. If not, consider holding them at EJ in the account with the lowest fees. If in the future they go down in value or you have sufficient capital losses harvested to balance out capital gains from liquidating these, do so.

This is great advice. I would second all these recommendations.

I know several people paying high fees at investment places and I hope that some day they wake up and change to low fee investing.

[BrownEyedGirl_27]

Oddly enough, EJ is a “friend” to anyone who invests with them.

The best day to leave is yesterday. Today is the next best day.

+1

[Silverado]

Yeah, I would not worry about the state of the economy to make the move. You will be better off in the long run with lower cost investments.

Luckywon gave a good summary.

You will likely find you will be down one 'friend' at the end of this.

[Watty]

One thing to do before your leave is to make sure that you have printouts of any needed statements and information to verify what your cost basis should be in the taxable account. Once you close that account you may not be able to sign on and they may be very unhelpful if you ask for that information later.

[student]

As others have said, transfer now. If you are open to transferring to places other than Vanguard such as Merrill Edge or Etrdae, take advantage of transfer bonus and they will pay for transfer fee charged by EJ.

[BillWalters]

Please report back and list all the fees you’re charged when doing this.

[drdrgolf]

When is the best time to plant a tree??
Answer: 20 years ago.
2nd best time to plant a tree?
Answer: Today.
Do it ASAP.
Keep the plow down.
Salute!
Dominic

[Call_Me_Op]

Just wanted peoples opinion. I have about 800K invested in many many different funds.......

That's your first problem.

[David Jay]

Always work with the brokerage house receiving the funds, they have the biggest incentive to make it go smoothly. Vanguard, Fidelity and Schwab are the most common brokerage recommendations.

[Jack FFR1846]

Don't sell within EJ to buy other funds within EJ. You'll get surprise Exit fees and of course the infamous 5.75% sales loads to buy with some funds.

If you only sell to go to cash or leave everything and transfer in kind, you'll just be hit with $95 per account to transfer.

I'll make an assumption that you're paying 1% for a management fee (AUM) and on average 0.5% to be conservative on expense ratios (probably is actually higher and of course the loads remove money right from the start). At 1.5% with $800k invested, you're paying $12k a year for pretty much nothing. Compare that to my own portfolio, where my "all in" cost on $2.6M is $405.71. Pretty stark difference, eh? I mean....if you want to make your "friend" happy, move your money and write hinm a check for the $11.6k that you're paying him for nothing.

Move the account today. Every single day you wait costs you money.

[Laker1]

Today at 9:20 seems like a good time to move it in kind and then let the new house help you make the adjustments to a simple 2 or 3 part portfolio. I wish I had done it earlier for sure!

[Sandtrap]

The best time to leave Edward Jones and transfer "in kind" to a low cost brokerage such as Vanguard, Fidelity, etc . . .
was. . yesterday.. . all at once.

If not, then do it "now".
j

[Chrono Triggered]

I just wanted to know should I, wait till the economy stabilizes, wait till investments return to pre-pandemic levels, or just do it asap.

This is a clear example of anchoring. Think about this another way; if you had your assets in cash form, would you buy your current investments right now? If the answer is no, then there's your answer. You essentially purchase your portfolio every single day, so if you want to do it asap (I would), you should.

[retiredjg]

Does it matter on timing of this switch.

It might. If these funds are in a taxable account and will not transfer to Vanguard in kind, they can be liquidated and the money moved pretty quickly. But if you are talking IRA to IRA rollover, that could mean the money is out of the market for a few weeks.

There is no reason to wait for things to return to pre-pandemic levels. If you sell low at EJ and buy low at Vanguard, there's no real loss there.

You might want to wait until things are not swinging up and down every other day though. Although we might already be at that point.

Is there a reason you have to move it all at once? What about moving it in 2 or 3 portions?

Find out how many and what kind of fees you'll need to pay to get out of there.

[Stinky]

Welcome to the Forum! Glad that you posted your question about Edward Jones.

I have about 800K invested in many many different funds with Edward Jones....

Of course my financial advisor is a good friend of mine,....

I know I am just throwing money away staying with Edward Jones and I must leave.

Looks like you've already made the decision to move. That's a good thing.

If you have $800,000 with Edward Jones and are paying 2% more in fees and mutual fund costs than at Vanguard, staying with Edward Jones is costing you $16,000 per year. That's $1,333 per month of money that's lost to you forever.

I wonder whether the "friendship" with the Edward Jones advisor will continue after he ceases making $thousands per year off your account. I would bet that the answer is "NO".

Since you've made the decision, move now.

[BrooklynInvest]

Have been with Vanguard for decades so certainly not an expert -

If the specific funds you're in are also on a low fee "direct" platform like Schwabb couldn't you transfer there in kind more quickly with no time out of the market, then once you've eliminated the advisor and their layer of fees, sell your high fee funds and go into index overnight? Ie move the funds as is as much as possible to eliminate the advisor fee, and then optimize your specific investments?

Guess they could also be available on Vanguard's brokerage platform??

[cherijoh]

Question? Does it matter on timing of this switch.
...
just do it asap.

I think you've answered your own question. I'd move on it as soon as is practical. I don't think it will take 4-6 weeks. To minimize time out of the market, you could look into a transfer in-kind. This way, the assets that aren't exclusive to EJ will come to Vanguard as is (instead of as cash), then you can pick and choose when to sell them off.

Eliminating any high expense ratio funds will likely be one of the first priorities.

Regards,

Per the VG website:

We offer a wide variety of mutual funds from other companies, including no-transaction-fee (NTF) and transaction-fee (TF) mutual funds—many without commissions.

So I recommend you do your homework. Sit down with your list of mutual funds and determine (A) whether VG will even allow you to own those funds. If not they will need to be sold if you move your assets to VG.

Then determine (B) whether funds that you can own in a VG brokerage account fall into the NTF or TF categories. NTF funds can be traded for $0/trade on line no matter what your asset balance in VG Funds or ETFs. TF funds charge $20/trade on line if your existing VG assets are under $500K. Between $500K and $1M in assets it drops to $8/trade online. Above $1M it is free on line.

If on the other hand you need some hand-holding and want to do the transactions on the phone it can get pricey pretty quickly. NTF funds charge $50/trade if your existing VG assets are under $500K. Between $500K and $1M it drops to $8/trade online. Above $1M you get some free trades and then it reverts to $8/trade. For TF funds it is also $50/trade if your existing VG assets are under $500K. Between $500K and $1M it drops to $40/trade. Above $1M you get some free trades and then it reverts to $8/trade.

If you are not planning to keep the funds in which EJ has you invested, you need to weigh the costs of transferring shares to VG and selling - of course EJ may also charge you fees to sell the shares before making the transfer.

[JPH]

Always work with the brokerage house receiving the funds, they have the biggest incentive to make it go smoothly. Vanguard, Fidelity and Schwab are the most common brokerage recommendations.

This is what I would do. Call Vanguard and ask how they can make this go smoothly.

[Lalamimi]

Moved from EJ to Fidelity late November. Advise - Talk to Vanguard, confirm which MFs will not transfer - there will be many, I bet. Have EJ sell those immediately and any others you don't want to transfer if you have identified. THEN, print out everything you can from the EJ account, cause they will lock you out almost immediately. THEN have Vanguard transfer everything for you. We did not do it this way, we had Fidelity initiate, which was fine. However, EJs drug their feet on the money from the funds sold, and it took over a week. We had hundreds of thousands in limbo early Dec. Do it. Today! You will get with $95 fee that Van guard should reimburse. Of course there are internal fees for selling, but oh well...

[retiredjg]

Last I heard, Vanguard does not reimburse fees, but Fidelity does.

[02nz]

Lots of good advice here, particularly on working with the receiving institution. As for being out of the market, if you have other holdings in cash or bonds, you can put those in the market when the assets (that have to be sold at EJ) are sold to maintain the same overall asset allocation.

[02nz]

Last I heard, Vanguard does not reimburse fees, but Fidelity does.

Pretty much everybody does except Vanguard.

[HollyG]

Great advice above!

Always download all transaction activity first.
Make the initiation with the broker you want to use as an in-kind transfer mentioned above.
Call the advisor and thank him and move on.
It shouldn't take long to complete.

FYI: It's $95 fee EJ charges per account to close. If you have a Roth, Traditional, and taxable. That is 3 accounts so $95 each.
Then again that's nothing compared to the fees....

Then afterwards

[pkcrafter]

riperobgyn, great reason to step into the forum, welcome.

Yes, you want to make the transfer ASAP, but you have to make sure of a few things. There are some very suggestions above, so I'll just add a few items--

You will find out just how much of a friend your advisor is when you move your assets.

Is this a taxable account? More than one type of account? They will get one last shot at you going out--$95 closing fee/account.

https://www.edwardjones.com/disclosures ... index.html

The right way to do this if there are tax-advantaged accounts is to initiate the transfer at Vanguard. You would want a custodian to custodian transfer, but you must make sure Vanguard carries all the funds that will be transferred or some will be let behind and the EJ account won't close.

Check here...

https://investor.vanguard.com/other-funds/

Get 'er done.

Paul

[HomeStretch]

If part of your hesitation to move is because of your friendship with your EJ advisor, prepare a short response to any questions from your advisor such as “thank you for all your help as I now feel confident to manage my investments myself.” Just keep repeating this. Don’t engage your advisor about fees, etc. as it will only open you up to a dialogue to convince you to stay.

As another poster said, be prepared for your friendship not to survive this. Hopefully it will. But AUM advisors are very skilled at creating a friendship and community presence to increase their client retention rate. A true friend would support your decision about how to invest your money.

[Hiwatter]

When is the best time to plant a tree??
Answer: 20 years ago.
2nd best time to plant a tree?
Answer: Today.
Do it ASAP.
Keep the plow down.
Salute!
Dominic

I opened this thread to post the same thing...

Leave EJ now. Don't wait.

[Dottie57]

Always work with the brokerage house receiving the funds, they have the biggest incentive to make it go smoothly. Vanguard, Fidelity and Schwab are the most common brokerage recommendations.

+1

[chipperd]

Yesterday was better than today and today is better than tomorrow.

[riperobgyn]

I want to thank everyone for their opinions and advice. This is very helpful. And thanks to Bogleheads.org, one of the last places where one can get true honest opinions on investing.