Edward Jones Review 2023
Are You Getting a Fiduciary for the Fees?
Edward Jones is a traditional brokerage firm. Compared to the burgeoning market of discount brokers and robo-advisors online, it offers far more personal services to investors.
The fees for a full-service broker like Edward Jones tend to be higher. The key question is whether the quality of investing decisions makes up for it.
Edward Jones offers in-person advice and investment management services through its 19,000 advisors across the U.S. and Canada. It charges very high fees but provides a high level of customer service and many resources for investors.
Edward Jones Review
Commissions & Fees - 4
Customer Service - 10
Ease of Use - 9
Tools & Resources - 8
Investment Options - 6
Asset Allocation - 8
7.5
Total
Edward Jones is a full-service investment firm that provides advisory and money management services. While we like the professional and personal investment advice, be aware that it doesn't come cheap. You could be better off using a robo advisor.
In This Review
What Is Edward Jones?
Edward Jones is a full-service brokerage firm operating across the U.S. and Canada. Founded in St. Louis in 1922, it built a reputation through the 20th century as a portfolio manager that was deeply invested in its clients.
The company opened branches across the U.S. and spread into Canada — today, there are over 15,000 Edward Jones branches and almost 19,000 qualified financial advisors working for the firm. If that seems like a strange ratio, that's because a crucial part of the company's goal is to reach clients where they live and offer the same high quality of service, rather than clustering in big cities.
Edward Jones, the founder, was a legendary figure in the personal finance world and is partly why the firm is still thriving after a century of trading. Today, the broker's advisors earn money through a combination of commission fees and revenue sharing.
In an age where customer service is increasingly automated and online brokers often redirect their clients to a “Knowledge Base” FAQ page, the hands-on, committed customer care offered by Edward Jones is considered priceless by many of its loyal customers.
The firm has around $1.7 trillion in assets under management (AUM) and serves seven million clients. It specializes in long-term investment prospects.
Is Edward Jones a Fiduciary?
Edward Jones does not serve as a fiduciary except for at the Plan level of retirement plans. This means that their advisors aren't legally required to put their clients' needs ahead of their own. And Edward Jones' compensation disclosure admits that some of its advisor incentives could lead to conflicts of interest.
How Does Edward Jones work?
Historically, Edward Jones advisors were distinct because they were accessible even in small towns and communities across the U.S. and Canada. This is still true. The company has branches pretty much everywhere.
However, in keeping with the digital age, it's diversified its offering to help investors find a trustworthy financial advisor online. Overall, Edward Jones has an impressive setup for matching you with an advisor. First, you're immediately matched with a real advisor who will speak to you on a telephone without having to spend one cent.
When you first sign up for Edward Jones, you take a quiz to help match you with an advisor and determine your investing goals. The quiz questions are well designed, and multiple questions offer the option to enter additional text where appropriate. The questionnaire goes out of its way to help you put personal concerns front and center. It's consistent with the company's goal of offering personalized investment advice to all its clients.
Finally, while Edward Jones is a 100-year old company, it has a clutter-free, easy-to-use website. The service also works smoothly on the firm's mobile app, available on iOS and Android.
Edward Jones Pricing & Fees
Full-service brokers are substantially more expensive than self-directed online stock brokers. This is certainly the case with Edward Jones, which has a number of fees.
Management Fees
These depend on the type of account you choose. A Select Account incurs commissions on investments. For all other account types, the broker charges a Program Fee that's a percentage of the value of your account.
Note that the costs you pay in a Guided Solutions accounts are fee-based, not fee-only. And Edward Jones says that this annual fee does include internal investment expenses.
The management fee (also referred to as the “program fee”) begins at 1.35% for an investment of $250,000. It scales down from there, reaching a rate of 0.50% for assets valued over $10m.
- First $250,000 — 1.35%
- $250,000 – $500,000 — 1.30%
- $500,000 – $1 million — 1.25%
- $1 million – $2.5 million — 1.00%
- $2.5 million – $5 million — 0.80%
- $5 million – $10 million — 0.60%
- $10 million – $20 million — 0.50%
The system is tiered, meaning that your first $250,000 of assets will always be charged a 1.35% annual fee. In real money, this means that you're paying annual fees of:
- $3,375 for $250,000 invested
- $12,875 for $1 million invested
- $77,875 for $10 million invested
- $127,875 for $20 million invested
You're probably not struggling to pay the bills if you have $20 million of assets, but being hit with an annual fee totaling almost $128,000 is still pretty steep. Investors with fewer assets feel the sting most keenly; $250,000 represents an impressive portfolio for many middle-income savers. And being charged $3,375 per year for your hard work saving money doesn't feel great.
Of course, the logic is that the Edward Jones fees are more than covered by a formidable long-term return on investment (ROI), which it says is achievable only when you work with the Edward Jones team. Unfortunately, we've got more fees to consider before examining whether this claim holds up.
Portfolio Strategy Fees
The portfolio strategy fee is another tiered fee for all broker-provided advisory solutions. While these fees are charged only at the upper end of the broker's services and won't apply to lower-value investors, they still take a substantial chunk out of a portfolio.
These begin at 0.09% for the Advisor Solutions Fund Model and 0.19% for the Advisory Solutions UMA (universal market access) Model. This cuts down through the tiers to reach a rate of 0.05% for the top AUM band.
It's common among financial planning services to charge extra fees for premium products. However, the strategy fee seems a little gratuitous with the amount you're already paying in management fees, especially at an opening rate of 0.19% for the UMA Model.
Trade Commissions
Select Account clients are charged trade commissions whenever they buy or sell assets. The commission varies depending on the type of asset that you buy.
With a Select Account, you have the final say on investments. If the tiered program fee structure seems like an awful lot of money for having someone else make investment decisions for you, the Select Account could be a preferable option.
In general, Edward Jones' fee structure is very complicated and abstruse.
Edward Jones Features
Financial Advisors in More Than 15,000 Branches
At the center of how Edward Jones works is its geographical structure. Unless you're deliberately trying to avoid civilization, there's likely a corporate office near you.
You can call, you can email, you can book an appointment at the office. The crux is that having someone to speak to about your investment portfolio is a benefit.
Personalized Service From a Qualified Financial Advisor
It's not just the availability of customer support that makes Edward Jones different from many popular discount online brokerages. It's the quality of advice you get and how this is tailored to your interests and needs.
Your money manager knows your portfolio and goals. For example, if you're averse to investing in oil and gas pipelines because of environmental concerns, your advisor could make sure to stay away from such stocks.
Related: How to Know if a Company or Fund Is Really ESG
Wealth Management Services
Let's take a look at the brokerage account options from Edward Jones. Its available brokerage accounts include:
- Traditional IRA (individual retirement account)
- Roth IRA
- SEP IRA (simplified employee pension IRA)
- SIMPLE IRA (savings incentive match plan for employees IRA)
- 529 plan (qualified college tuition plan)
- Taxable account
Whatever type of account you choose, you decide whether you want to manage investment decisions yourself or let your advisor take care of it. Here are the various portfolio management options.
Select Account
This account comes with no minimum investment requirement. It allows access to numerous markets, including:
- Stocks
- Bonds
- Mutual funds
- Annuities
- ETFs
You have the final say on all decisions. You have access to assistance from your advisor but not the full research service available with a guided account.
Guided Solutions
A Guided Solutions Fund Account allows you control of decision-making, but your advisor will do thorough research on your behalf and offer individualized guidance. These accounts charge asset-based fees, so you need to factor that into your investments.
With a Guided Solutions Flex Account, you get access to more markets than with the Fund Account. But the minimum to invest is fairly high at $25,000. Again, you have the final say on investments. An advantage of this type of account over a Select Account is that you have access to the same variety of markets, but your wealth management benefits from expert input.
Advisory Solutions
These represent the most hands-off investment option. With advisory solutions, your advisor will also serve as the executive decision-maker for your investments. While this may feel like it risks your investing in an industry that causes a conflict of interest for you, your advisor will take note of any options you'd rather avoid and respect your decisions.
Advisory Solutions accounts are perhaps the best financial planning option for a retirement account. But they require minimum investments of $25,000 for the Fund Model and $500,000 for the UMA Model.
How Do I Contact Edward Jones?
There are multiple ways to get in contact with a member of the Edward Jones team. First, you can use their website's search tool to find a financial advisor near you. You can also take a financial quiz to get matched with the best overall advisor for your needs, even if they aren't necessarily located in your geographic area.
For customer service questions or complains, you can call 800-441-5203 or email complaints@edwardjones.com. Edwards Jones' customers service hours are 7 AM to PM (CT) on Monday through Friday and 8 AM to 4 PM (CT) on Saturday and Sunday.
Who Should Use Edward Jones?
Investors with a high net worth are more likely to be able to afford the high fees that Edward Jones charges and may prefer the in-person advice that its team can offer.
But should everyday investors use Edward Jones? This arguably depends on your level of expertise. But if you know how investments work and don't need a lot of hand-holding, you could probably save a lot of money in advisory fees by choosing a commission-free stock broker or low-cost robo-advisor instead.
Who Is Edward Jones Not Suited For?
The average investor looking to set up a regular taxable brokerage account or a college savings account will often find more value elsewhere. The fees simply don't justify the benefits unless you're in it for the very long term. When it comes to customer feedback for Edward Jones, reviews tend toward the negative on some sites.
You could argue that the time it takes to learn how to invest money sensibly is much cheaper than the ongoing fees you pay setting up an advisory plan or investing in a mutual fund through this broker. While you have access to high-quality advice, the high fees will be charged as long as your account is open. The investment of time to learn to manage your own funds is worthwhile.
Edward Jones Pros & Cons
pros
cons
Edward Jones Alternatives
So who should you invest with if not Edward Jones? Let's examine the competition.
In today's investment world there are much better lower-cost options. For example, robo advisors can manage your money for a fraction of the fees. Specifically, firms like Betterment or Wealthfront are suitable for individuals who don't have complex investment portfolios.
If you want access to a human advisor, we recommend Empower's service over Edward Jones'. Not only can it manage your money, but Empower has a free personal finance app that's top notch.
| Highlights |  |  |  |
|---|---|---|---|
| Rating | 9.5/10 | 9/10 | 9/10 |
| Minimum to Open Account | $100,000 | $10 | $500 |
| 401(k) Assistance | |||
| Two-Factor Auth. | |||
| Advice Options | Automated, Human Assisted | Automated, Human Assisted | Automated |
| Socially Responsible Investing | |||
Verdict — Is Edward Jones Worth It?
For the average investor, Edward Jones is probably not the best choice. You could spend more time learning about making investment decisions by yourself and choose a platform with lower fees.
But if you have a lot of capital and you're looking for a long-term, hands-off investment strategy, then Edward Jones could be worth considering. You'll get a high level of customer service and your investment decisions will be informed by experts.
InvestorJunkie receives cash compensation from Wealthfront Advisers LLC (“Wealthfront Advisers”) for each new client that applies for a Wealthfront Automated Investing Account through our links. This creates an incentive that results in a material conflict of interest. InvestorJunkie is not a Wealthfront Advisers client, and this is a paid endorsement. More information is available via our links to Wealthfront Advisers.
I was with Edward Jones with my former employer. Edward does just enough to make sure you never become independent of them . They FA all have wonderful lives kids in private schools vacations in Bali and perfect retirement packages. There clients blue collar to middle white collar are nothing more than bag holders . I fired them in 2012 and never looked back . A self directed Charles Shaub IRA has tripled and its fee free . All Edward Jones graphs and plans are hyperbole. Do not think for one minute your FA will pick the first stock for you . They don’t they do nothing but churn your accounts every 36 months and get commissions.
I will have to agree with this article and the following comments on the high cost of EJ. I spent 23 years as an EJ rep. As they have stuck with their outdated model of 1 FA/ staff per office their expenses have risen dramatically. My little town of 13,000 people has 8 EJ Financial advisor offices. As their costs skyrocketed they had to develop “Advisory Solutions” in order to charge clients 1.35% on their accounts which were invested into American Funds earning .025% 12b1 fees. They need to earn more money from the clients so they can keep sending the EJ cult members on their fabulous trips around the World twice a year. EJ Clients should start to find other cheaper places to invest their funds and not get caught up in the “ahh shucks” good ‘ol boy FA in their local town. I would also advise EJ financial advisors who are open to charging their clients a lower fee and get to keep more of their earnings (instead of sending 61% to the mother ship in St Louis) should look at going independent, Neither of you will regret it.
“There business model is going away”
If you can’t explain “Portfolio Beta” and “Efficient Portfolio Theory” and “Markowitz Modern Portfolio Theory” without using Google, their business model is not going away.
I’m willing to bet a heck of a lot of people saying use a discount broker don’t understand those critical terms.
Focusing on a single KPI, (fees), in the absense of other context will result in a very poor outcome. It’s counter factual to assume that you wouldn’t have received a higher return, that more than pays for the fees, if you used an advisor rather than choosing your own investments.
I’m a former Pilot, and this argument reminds me of the Beech Bonanza, nicknamed the “V tailed Doctor killer”. Some [not all] Doctor’s think that because they are a doctor they are talented at everything. Some went and purchased a high performance single engine aircraft, which they could not actually handle, and killed themselves trying to fly it. Much like investing, some educated people think that because they are educated in one field, they’ll be an expert at finance and investment appraisal.
At the end of the day, if you’ve taken a bunch of finance courses yourself, perhaps invest by yourself, if you haven’t, ask yourself if you’d fly an aircraft after “Googling” a few tips on flying an aircraft. 😉
I AM a medical doctor (radiologist) and very familiar with the over confidence some physicians have, aka I can take out a gallbladder so surely I can fly a plane, which has obviously led to several disastrous results. Investing in a low cost index fund is NOT the same; it’s very easy to do. Get on the Bogleheads site and educate yourself. DO NOT put your hard earned money with Edward Jones or other similar investment firms that charge well over 1% annually. This is what Jack Bogle called the “tyranny of fees”. The local EJ person is not your friend (just like the friendly car salesman is NOT your friend).
EdwardJoines financial advisor is a personable individual first and foremost. Having financial literacy beyond the basics is not required as their audience is financially illiterate.
I know from experience as I have moved clients away from EdwardJoines.
It is all about the personal touch, not the making money. Their research is subpar, the advisors lack the ability to even read a balance sheet.
I was a Financial Advisor for over 40 years, Dr. and can say that it’s a very rare person who can educate themselves well enough to handle their own investments. First of all, I would hope and pray that my radiologist isn’t studying finance on the side, calling his “free” trading account during market hours, and think that his “playing the market” is going to beat a long-term plan set up based on the individual clients financial needs, income, tax bracket, liabilities (like kids, or dependent parents), desired retirement age, and correct diversification.
My clients had my cellphone number and could reach me just about anytime, or leave a voicemail. And I had a portable phone since the mid-80’s. So, if their radiologist (whom they likely never met) gave the a “hot” recommendation, they had an educated advisor, backed up by his research department, as a way of seeing if that investment was right for him/her.
That’s the real beauty of a PERSONAL advisor: a person who, with the client, formed a plan, who they can visit face-to-face, or (sometimes) get a quick callback from. Not a toll-free number that is the same for everyone using the discount broker. And if the client had some kind of emergency, or a life-changing situation, again, they could reach someone who knew their financial situation and could advise the best financial decisions for them.
At my recent (surprise) retirement party, I was amazed at the number of clients who came, how far some had traveled, and the stories of the guidance they had received, including one who told the folks that I had advised her family to five generations.
That, not commissions or fees, is the reward of giving people the advice they need.
I thought I’d tell you what happened when I transferred my accounts from Edward Jones to Wells Fargo.
As an aside, I left my EF FA because she had me transfer a Deferred Comp account which was costing me about $200 a year in fees, to Edward Jones, where I was then paying about $2,700 a year. Multiply that over decades and all the lost gains because the money (MY money) is going into my FA/EJ’s pocket and not mine. It’s criminal.
EJ was instructed to transfer “in kind” only. What did they do instead? They liquidated anything that wasn’t “in kind” (obviously not a problem in an IRA, but they also did this in my brokerage accounts, creating a tax liability for me) and they are now telling me that I signed something saying that if I didn’t work with my EJ FA to transfer/close my accounts that they had the authority to liquidate my accounts. Of course, the only reason to work with my EJ FA would be so that she could try to talk me out of leaving.
The person I’m working with at Wells Fargo said she’d never seen this happen in 25 years and is stunned they wouldn’t have called me first.
I’ve filed a complaint with them that they made unauthorized trades.
I’ve been with EJ for about 2 years. At first, it was just a 401K rollover, done and forgotten, which is why I went with Edward Jones, a “name I trust,” and with a trustworthy broker who’s a part of my community.
Around October of 2019 I started to get nervous. Didn’t really know why. I started looking at historical charts of the markets. Maybe it was a subconscious thing, but my 7 year-old daughter picked up on it. She and I started reviewing charts and comparing today to yesteryear. Her prediction: the market was going to have a giant correction soon. She stated out loud what I had been fearing.
So I pulled 95% of my investment (all equities in boring companies like GE and IBM and U. S. Steel, that kind of thing) and put it into cash. Then held and held. My broker was a bit confused, but like I said, he’s a nice guy. He never really pressured me, only gave me encouragement from time to time to reinvest. Then came March 2020.
Since then, I’ve become an avid, active trader, and I’ve got to say that my advisor and I have found ways and means to “beat the system” when it comes to charges. My funds are divided into what I call “delivery systems.” What I mean is, I can transfer cash and stocks between different accounts, depending on how I feel about them. Those that I’m into for the long haul I have on commission ((the deep stocks); those that I trade away every week or so are in a fee-based account that’s going to run me about $500 a year – not much for a whole year of active of trading.
No, EJ isn’t perfect. I’ve lashed out at the corporate office from time to time when they start interfering with my success (they mean well, but they pressure me to “behave” and that ain’t going to happen.) Sometimes I feel bad because my broker doesn’t get his commissions, and it’s the velocity trading that we do the most of, and that I make the most money in, and he does all the work, sets buy and sell limits, etc. etc. etc. In the last year I probably traded (bought or sold) $300K in transactions, and paid less than $1500 total for all services, including commissions. That’s pretty good – less than half a percent. Well worth it.
Will I eventually strike out on my own? Maybe. My broker and I have talked about it, and he’s willing to set me up so that I can play some riskier gambles if I like. But I’ll likely stay with EJ for awhile. I like the security, the options available. I’m sure other brokerages are comparable, and maybe better. But I’m good for now.
Break away brother….you are just throwing good money away with the fees. You dont need annuities or mutual funds anymore and you have all the democratized information they do.
My mother-in-law, an EJ client, just passed away. She lived in a small town, population 25,000. There are 5 Edward Jones offices there, more EJ offices than Starbucks. Here’s what you pay for not wanting to learn.
Does a great grandma who has 500k total, really need 27 different mutual funds? That’s what she had. Liquidating her account took 2 months and had to be done almost exclusively by snail mail which is done between you, your broker and the home office. And remember the part in this article about churning? Here’s what 2% adds up to over time. There is a well known rule about investing called 2/72. If you bought the exact same stock from 2 different brokers and the fees at one was 2% less than the other, in 30 years you would have 72% more profit from the one who charged less. As someone below said…”Get a book and learn”
Buddy, I hate to tell you this but your mother-in-law was not paying 2% at Edward Jones. If she had 500k she was paying closer to 1.1% max. You also cannot “Churn” in a fee-based account because you do not pay commissions in a fee-based account.
Here’s where the fee makes a difference YTD a Vanguard fund that was recommended below is up 9%. My managed Roth IRA that I pay 1% on is up 15% after fees.
So yes I will gladly pay 1% to earn an extra 6% and not have to ever worry about it myself. That’s what you pay the fee for.
Buddy, I hate to tell you but the advisory fee for a $500k account is 1.35% + the expense ratio of the mutual funds which come out to around 0.50%……so that is an annual fee of 1.85%….. I have no clue where you came up with 1.1% max but obviously you have no clue what you are talking about.
I have the same experience. So has the rest of my family at EJ for the last 20+ years. To be fair, not all advisors are equal -even at a firm like EJ. But, if you do your due diligence in interviewing advisors (anywhere), you’ll find someone who actually knows what they’re doing, utilizes the research team and CFAs, and sets you up for bigger long-term wins than most people will get with their indexing.
Jordan, hate to tell you this but there is NO way EJ can beat low cost Vanguard funds with an expense ratio of less than 0.09 percent. Get on the Bogleheads site, educate yourself. Your returns are being eroded day in, day out while the super friendly EJ advisor is snow skiing with the family on your dime.
You missed his point: he’s doing what he wants, has advice, said his fees were pretty good, and he’s happy.
There’s an old adage: you get what you pay for. Brother.
Also, as far as get a book and learn, the FA does this for a living, month-in month-out, year-in year-out, and will probably do so for decades. I had clients who did their own thing, for awhile, but usually realized they didn’t have access to all the information I did, nor did they want the sleepless nights, or want it as a job.
I invest on my own and am conservative and safe. I average over 100% return per month, 149% so far this month December. I use to have a broker when I was young and everything I saved he lost. Lesson learned
Wow! that was the biggest lie I’ve heard on this entire site. Average 100% return per month. How long ? 1 month history? You sound like one of these people that brags about winning $500 at the casino but forgets to tell everyone about the $5,000 you have lost before finally winning your $500. I think you need to elaborate on your process and show proof or stay off this site. We’re seriously trying to get educated here.
Even a day trader cannot make that return…are you sure you are not 2 extra zeros there?
Wait until the end of this month. Stifel is in negotiations to buy Edward Jones, and that will change everything.
Absolutely not true. Edward Jones is a privately held partnership and is not for sale.
Still waiting. Now JUNE.
No matter where you go to invest your money whether it be Edward Jones or a robo advisor there will always a fee to be paid and those fees do add up over time. What needs to be looked at in truth is the return you are getting, going to get you to achieve your financial goals. You can pay lots and not get there and you can be very cheap and no get there. So in my opinion its really all dependent upon the individual investor, and not the firm in which you go with. If your returns after expenses are 10 percent a year annually, and paying that 1.25 percent and a small amount for ETF’s and mutual funds, then I’d say its worth it.
On the other hand, if you are guide by the latest emotions of the market and the latest trends etc then you will always lose and never get to your financial goals.
Lastly and advisor can be just as emotional driven as the investor so you have a case of the blind leading the blind. Though if you follow investor wisdom from the greats throughout our time you will come to know that fees are not the first thing to look at. Its more important to look your financial goals and what displine and strategy will you have to get there.
Nothing is free and the cheap will not get you there sooner.
Correct.
During the 2020 COVID-19 stock market crash..So many ppl I know got scared..cashed out..lost $$$$$. My EJ advisor was either calling me or me him every day while it sank. He is a CPA also ..and was a broker since the 1980’s and has been through all of these cycles. His advice at the time..hold tight and start BUYING now! Smart man.
I will gladly keep paying the 1% fee.. His advice kept me grounded and made me x$$$ more than his “fee”.
Unless you are not working and can sit around all day and track all of your investments and do you all of your own trades/MF shuffles then yes..you don’t need an advisor. Sorry I work a lot.
FYI.. others are correct though. I do my own ETFs / Individual stock trades though my Schwab account.
Exactly. I’ve been talked outta some horribly impulsive decisions from my advisor. Anytime the market shifts with opportunity, I am notified. Then I can decide from there to approve or disapprove the suggestion. But I know people who panic sold during covid crash at older ages that had control of their stuff directly. If you’re overly emotional, the right advisor can keep you grounded so you don’t log in and pull the trigger yourself without an extra barrier.
I think most of you are missing the boat on the whole commission thing. Even if you are in a fee-based account, the advisor is still working off of commission. This comes in the way of front-end load fees (which can be north of 5% of your contributions before they invest a dime of your money). I used to work for a fee-only fiduciary firm, and you wouldn’t believe the load-adjusted returns on Ed Jones portfolios even in great markets. Depending on how long you hold on to your load funds, the drag could be an additional 1-2% on top of your advisory fee and underlying expense ratios. Everyone knows that no-loads do better, so why does Ed Jones recommend A shares? Because they make 50-90% commissions on the front-end load fees. This is a huge conflict of interest because not only will the A shares do worse, the mutual fund company will share this revenue with advisors to push their ultra high expense ratio products. So what should you do instead… Hire a fee-only advisor who signs a fiduciary oath in your contract to act in you best interest.
This is simply not true. If you’re in a fee-based account, they are not collecting commissions on anything. Especially not mutual funds. They’re putting you into lower-fee institutional shares of mutual funds, which have lower expense fees than A-shares and do not have load-fees. It’s almost impossible to break 1.6% in total fees per year using institutional shares. They compete with early ETF fee pricing before they broke below 0.1%.
Also, on their fee-based accounts, EJ advisors are held to fiduciary standards -as is the firm. Not sure how anyone can miss this as it’s literally in their Form CRS and the way they license their advisors and evident in the compliance standards they hold, which is based on the new DoL rule. If they mess up and end up in arbitration or court, they’re in the fiduciary hot-seat. Even on commissionable accounts, they can get tagged as a fiduciary unless you’re clearly acting outside of their recommendation.
I recently reviewed an account that was fee-based and this is what I found. The same fund but two different series. One for Fee-based accounts and one for Commission based accounts.
The advisor/firm was earning a trailer on the Commission based mutual fund in addition to the account wrap fee.
It does happen.
I have been with Ed Jones for 4 years. I may be naive but I really don’t understand why so many people are commenting on Ed Jones’ high fees and commissions.
In one of my Ed Jones accounts, I invested 1.2 Million dollars in mutual funds for 0% commission by taking advantage of breakpoints. In the same account, I invested $200,000 in stocks / ETFs and paid a ‘one time’ commission at the time of purchase a few years ago. The commission on those stocks was approx $6,000 at the time of purchase and trading activity has been limited since then.
So I paid $6,000 four years ago on a $1.4 M account that has grown 4-6% per year. That is about .43% total ( point 43 ) of AUM.
Can anyone comment and let me know what I am missing? I do not study my statements but maybe there are hidden fees? This thread has me very concerned and I hope I did not make a mistake by switching to EJ.
Sarah
Nope, the only thing that you’ll pay for is your next trade or whenever you sell off positions. Even then, your advisor could technically move you into a Guided Solutions account when you start liquidating, if the monthly fee breakdown ends up being lower than your selling costs.
These article is missing vital information off the Form CRS about their fiduciary arrangements, and many comments have no experience with EJ or it’s experience from at least 10-15 years ago before the modern fee-based account programs were setup.
Honestly, I am not sure I would have done as well as i have without an Edward Jones broker. Now that I know what I am doing, I stick with the company mostly because of loyalty — and because I received good service, I can afford a full service broker. I am rich.
I transferred assets into Edward Jones and it was a big regret. I did it because I liked the guy I met with. But I hadn’t done enough research.
Transferred out after 3 months and minimal fees. Glad I did.
Got a call from the guy the day I requested transfer and he was MAD at me. I didnt want to pay him for the exact same service and options I could get completely free at fidelity (or other places). It’s not his fault, others are just doing better that EJ
I’d be really curious to hear about what your situation is now and how things faired during March 2020.
I have had a brokered CD with Edward Jones for 5 years. This year, for the first time, I owe a $40 fee for having a self-directed IRA. It’s a 10 year CD that was picked by my “financial adviser”. How do they arbitrarily start charging an annual fee that was not part of the initial agreement. Instead of charging $40, why not $1000? I have research to do!
Interesting. 1) EJ has always had an annual fee for IRA’s, unless you have over 250k invested and then the fee is waived. Or if you were in a fee based account previously (where there was a percentage charged monthly) and then switch to a commission based IRA and now the fee is being charged. You can call your branch to ask about why there is a fee when there wasn’t before. And the fee is always part of the agreement, in fact the new account paperwork signed by the client agrees to it.
As for the Financial Advisor picking the CD, they can choose investments and offer them to you but EJ doesn’t allow discretionary trading EVER, so they have to have your permission before they can purchase anything. If you didn’t give the okay, you can report them. If you didn’t understand what you were buying, talk to them to get more information.
Thank you for your information. I have been with EJ for 20 years and with the same FA. He is honest as the day is long and has stopped me from making bad financial choices like buying or selling stock that I should not be doing. I am impatient and my FA is holding the reigns (sp). He is calm, well versed, explains everything to me and I consider him a good, trusted friend. I like that EJ will not offer or sell stocks that are substandard, hedge funds, etc. Nice backstop.
I am a “buy and hold” equity investor. Have been so for quite a few years. I’m older now and am getting into tax free muni’s and large CD’s. Over the last 30 years, I’ve been with American Express, Salomon Smith Barney, Smith Barney, and for the last 11 years…..Edward Jones. I’m no authority of any kind on the stock market in’s and out’s. However, I will say this. Absolutely you get what you pay for! You want cheap…..believe me….you get cheap. You want good quality investment advice…..you are going to have to “pony up” for it. There are goods and bads in all of them…..regardless of the name of the firm. You set there and bitch because you pay a 1.5 or 2.0 % fee for whatever…..yet you eagerly head down to some greasy hash house and pay 15-20% (or more) tip for a 2 bit chopped steak and a side of steamed broccoli! For Heaven’s sake….use a little common sense here people! Get a grip!
Comparing the 1-2% fee one pays a FA with the 15-20% tip one leaves a waitress is an apple to oranges comparison. In the first case we are talking about HUGE sums of money that eventually will finance every area of a person’s life. In the latter case we are talking about one incidental luxury a person indulges in; one fraction of a person’s overall life expenditures.
Furthermore one can opt to stiff the waitress if one isn’t happy with the meal or service. But that FA is still going to collect her 1-2 % fee even if she steers you into losing investments.
True, I could fire the FA. But say for 1% of a $1 million dollar account I am still out $10K for that year plus whatever investment losses I suffer. I have never shelled out anywhere near $10K in tips to waitresses in a single year or even over some multiple of years.
My short experience with Ed J. has been a night mare. I recently had a Father pass away.
Trying to get Ed Jones to reveal his holdings (a great secret) to the Estate has still not happened. The only discussion so far has been a $300 transfer fee. I would not recommend using their service to an one.
My Father’s Heirs will certainly not consider reinvesting with any Ed Jones rep. Their in sensitivity and unfounded $300 fee will cost them many fold in future earning with us and anybody who does a little research.
Help your Parents make better investing decisions.
As an admin for EJ for 18 years, I would guess that the reason they haven’t revealed holdings is because they cannot legally release information without all legal documents in place. It’s actually protecting the assets and the beneficiaries, by not allowing anyone access until all legal documents are in to prove who has legal rights to the information. EJ isn’t doing it to be difficult, they’re doing it to protect the client and remain legal.
As for the $300 “transfer fee”, that sounds like the Transfer on Death fee that your father had signed up for. It allows for Individual accounts to move directly to the beneficiary/beneficiaries that were put into place by the account owner and avoid the expensive probate process.
You don’t have to like Edward Jones but I find the people that I work with and for to be very conscientious, hard working and honest people. We don’t always see eye to eye with everyone but good communication is key to a good working relationship. I’m hoping everything worked out well and that you were able to process the account.
Well said Amber! Thanks for the facts!
Hi Kevin-
My wife and I have Roth accts at EJ. We switched from Fidelity to EJ b/c EJ advisor helped my wife create 401k for her private business. However, I’ve noticed that we’re paying ~$130/mo on each acct. That just seems very high considering each acct is about $125k. That’s $3k a year for a Roth acct. Granted our advisor has provided us some beneficial advice but that doesnt justify paying $3k/yr for retirement accts. Do you agree? What would you suggest if we rolled the funds into another broker? Also, he does convert our annual IRA contributions to a Roth. Is that something we could do with any broker as well?
Warren Buffett has famously said that the best investment most Americans can make is a low-cost S&P 500 index fund that will simply track the market’s performance over time. Buffett even went so far as to wager $500,000 of his own money that such an index fund would outperform a basket of hedge funds over a 10-year period — a bet he handily won.
Buffet says that for small investors with little experience and even less knowledge. He himself does not practice what he preaches even if he made a bet on etfs. He built his wealth being an activist investor and owning a business. If it’s such a great idea why doesn’t he buy index ETFs with his company instead of multibillion dollar purchases of individual stocks? Hint: read my name. Then wonder why people don’t hire their own money managers.
Let me preface this by saying that I am biased insofar as I am the spouse of an Edward Jones advisor.
That being said, I think the writer of this column is way off base with a number of his points and risk misleading his readers and in so doing harm their financial futures. My hope is that after reading this post he shows some journalistic integrity and fixes his incorrect assertions.
I feel that I can clarify some mistakes that the writer made as I am very familiar with the firm as both a spouse of an advisor and as a client as well.
1. Edward Jones is not perfect, nor is it perfect for every investor. You should interview multiple advisors and firms in order to determine if they are the right fit for you.
2. Cheaper isn’t always better. In financial advising, you get what you pay for, like most things in life. You can go to a Wal-Mart financial advisor (Vanguard, E-Trade, etc.) or you can go to a full-service broker. There’s nothing wrong with the “Wal-Marts” of the world. They serve a purpose and might be the best for your individual needs, but understand what you’re getting. You pay less because you get less.
3. In the writer’s column, he list IRA fees and stock fees as additional costs and that’s a bit of a misnomer. At Edward Jones you can be in either a transactional account or a fee based account. In a transactional account, you pay a cost when you buy or sell an investment. This type of IRA would potentially have an IRA fee depending on your balance at Edward Jones. You would also pay a percentage when you buy a stock in this type of account. If you are in a fee based account (a flat percentage for the year) you do not pay an IRA fee, nor would you be charged a percentage when you buy or sell a stock. They’re both included in your fee. Edward Jones offers both accounts so that their clients can choose what is best for them, unlike some of their competitors that moved to a fee only service.
a. Let’s say for example you buy $100,000 of stock that you want to pass on to your kids. In a fee based account, you would pay $1,350 per year at 1.35%. That would fluctuate up or down with account balance, but let’s assume the balance stays exactly the same. That’s $13,500 over ten years. Not a great deal compared to E-Trade if that’s all you were paying your advisor for. This is what advisors call “reverse-churning”. Collecting a fee for management and then not doing anything. Understand that your EJ advisor CANNOT churn this account as the writer mentioned. It’s an impossibility. You could make a million trades a year in this account and you’d still only pay the $1,350, way better than your E-Trade account. You only have to worry about reverse-churning.
b. What your Edward Jones advisor would most likely recommend in this scenario is that you instead make use of a transactional account and let’s say you pay $2,000 up front, or 2%. You then leave it for 10 years, and you still have only ever paid $2,000. Making your average fee percentage, a whopping 0.2%. Not bad. Keep in mind, that in this type of account, you would have to be concerned about churning, as you would anywhere. This is WHY EJ has your best interest in mind by offering both. You can pick what works the best for you.
4. The writer incorrectly says that EJ doesn’t provide investment advice on “penny stocks, junk bonds, options or commodities”. That’s not true. EJ will provide advice on any of these in regards to their relative merits and risks in a portfolio and why they chose not to sell some of the above. However, you can actually invest in both “junk bonds” (i.e. non-investment-grade bonds) and commodities at EJ through mutual funds or ETFs.
5. I’ve already stated why the writer is incorrect about “active trading”. Depending on how active a client is, they could pay FAR less than a discount brokerage firm. There is also no potential to churn accounts. That’s another one wrong in the “Cons” section. Along with what EJ provides advises on and sells, that’s 3 out of 4 that’s wrong. Last one standing is fees…
6. The thing that the writer is probably most incorrect about is the fees. The assertion that accounts under $10M are paying too much is ludicrous. First of all, 0.5% on a $10M account is $50,000 per year! If all a financial advisor does is portfolio management, why would a millionaire pay that much money when they could just go to Vanguard? They could save millions over their lifetime. Yet, your average millionaire will be paying that bill to a full service brokerage firm like Edward Jones, Merrill Lynch or UBS. Meanwhile the writer wants you to bat an eye at the $135 a year on your $10,000 account? That’s the cost of your Netflix subscription for a highly educated financial professional. This is an example of one reason why the rich are rich and the poor are poor. Most of the rich understand that value of leaning on a professional for advice in their specialization. Your EJ advisor will help you with more than just portfolio management. They will work with your CPAs to develop specialize tax plans, your estate attorney to create the legacy that you want for your family, hold your hand through down markets to keep you from making mistakes, knowing and caring for your family, etc. But, don’t take my word for it. Take the word of a company that has been brought up multiple times in the comments section: Vanguard. They did a white paper showing just how much value a financial advisor brings: https://www.vanguard.com/pdf/ISGQVAA.pdf. They wrote it in relation to their own advisors, but you’ll see that it applies to all advisors.
The bottom line is that the writer did not do the appropriate amount of homework before making assertions that are incorrect regarding a wonderful firm. I could go on further, but I know this is already a long post. Suffice to say there’s a reason why EJ is consistently rated as one of the top financial advising firms based on customer satisfaction: http://www.jdpower.com/press-releases/jd-power-2017-us-full-service-investor-satisfaction-study.
I would challenge the writer to challenge his own assertions. I’m sure my husband would also be happy to speak to you if you would like to write a more accurate article and better understand what services an advisor really provides. They’re no longer “stock-brokers” like you’re treating them.
Get the facts, you are kind of missing an important point. Edward Jones fees are extremely high if the advisor is just managing investments. Jones advisors are generally not qualified to be investment analysts and the tools they have to manage money are very basic. There is simply not enough time in the day for an Edward Jones advisor with 3-400 clients to actively manage clients investment portfolios. There are other people who can and do use economies of scale to manage investments much less expensively. However, managing money is only a small part of what a financial advisor does. Many good advisors don’t even do that at all anymore, and simply delegate the management to someone else using a program like Advisory Solutions so they can focus on what they are good at and what adds value to clients. Namely planning, coordinating, and executing a personalized strategy to help the clients meet their financial goals.
Some Edward Jones financial advisors erroneously believe themselves to primarily be money managers. Criticizing the cost of doing business with them relative to other more qualified, less expensive managers is warranted. I agree wholeheartedly with your final sentence. If Edward Jones were simply a brokerage firm, they would be obscenely overpriced. But for holistic financial consulting firm they are very competitive. That is their niche, they know it, and they are very good at it.
My experience with EJ is that the advisors push whatever corporate is trying to sell. Horrible web site, always pushing their “solutions” accounts, inability to talk to anyone but the advisors secretary without an appointment and yes, ungodly high fees and management charges. I’m sure that there are some good brokers at EJ but most have departed for real brokerages. If your investment goals include being ripped off then Edward Jones is the place for you.
I went with E.J. for five years after my dad passed on. I had 1.3 million with them. I think they are a good investment firm; however, they did not work for me. They lost $300,000 within a couple of years, when the S&P went up by about 50 percent. $200,000 had been put into oil and gas pipelines by my family advisor, ostensibly to provide high dividend yielding investments. However, within a year, the pipeline investments had melted down to about 0. My advisor refused to talk to me about it, and left me holding the bag. He moved me over to another office, which essentially did much the same thing: churned my portfolio and put some of the money into sketchy investments. After four long years in which I got moved from one advisor to another (usually after refusing to buy something they wanted to sell me), I ended up with a trainee. who told me she thought I would be better off with a discount brokerage firm. Thus I moved the remaining $1,000,000 over to Fidelity. I did have a focal point at Fidelity who helped me bring things over.
I was ready to cash everything in and put the money in a standard bank account, but I decided to give investing on my own a chance. I pretty much left my investments alone for the year. I take dividends, but I have not done a lot of trading. Fidelity is not charging me any fees to speak of.
One year later, I can say that lower fees definitely make a huge difference, especially if the brokerage firm is churning portfolios to generate commissions. So far, despite a “rolling bear” market, I’ve kept up with the S&P. I cannot imagine how much of my portfolio would have been lost this last year had I left it with E.J.. I really wish I had decided to do my investing on my own several years ago. Recently, I showed my E.J. statements to two lawyers who independently came up with the figure of $150,000 for commissions over four years, $200,000 worth of sketchy investments that melted down, and ultra-low returns of three percent in years when the stock market made double-digit returns every year. They have both said I could sue, but it would involve arbitration.
Personally, I think E.J. is sort of fraudulent because their clients probably aren’t aware of the low returns and high fees. However, I can’t really recommend that most people do it on their own, because it’s stressful, time-consuming, and takes nerves of steel. (You have to weather the market downturns without flinching.)
People have sometimes told me that there are fee-only, hourly advisors, but I have searched and cannot find even one. Note that fee-based is not the same as fee-only.
I still would like to find that perfect wealth manager, but haven’t been able to do so, because I think my solution is not ideal.
Transactional accounts are a joke, you can trade stocks and etfs and many MF’s for free at Schwab, TD, Fidelity, etc. Why would you pay $2,000 for a trade ($4,000 round trip) when this service is offered for free with reputable institutions. Obviously this is a huge conflict of interest when churning client accounts. Now on to your fee-based argument… ed jones IS ALWAYS WORKING OFF COMMISSION. The revenue sharing program they have with the mutual fund company’s is another conflict of interest to clients. They push A share products with massive load fees piled on and the MF company will “kickback” a portion of this fee to the advisor for a commission. Why does ed jones recommend expensive A shares instead of Vanguard funds which do better? Because they either can’t custody Vanguard assets (which makes them a crappy custodian) or they’re just in it for the money. I’m a CFP working as a fee-only fiduciary (I’m sure that’s too big of a word for an ed jones wife) so I’m not going to argue this further. Have fun on your ed jones paid for vacation to the Bahamas this year. Your hard working husband earned it.
I loved the comments by the EJ spouse, and as opposed to you and your comments, she showed class.
$2000 fee for one trade? It had to have been a huge position! Maybe too much in one holding for most people?
And I love that all you CFP’s talk about FREE accounts (but mention you are also fee-based).
So Schwab, TD, Fidelity, and others are FREE? WOW. So, how do they pay their phone bills, light bills, mortgages, employees, and all that expensive advertising ?
It would seem an easy explanation for you free advisors.
Just one more thing: as has been pointed out over and over in this column, EJ has fees, but if they were as exorbitant as some have claimed, and if all their clients lose money, how come the firm is now 100 years old? Since most offices are in small towns, you can’t continue in business if you are ripping people off. Word would get around, right? But there are no doubt some rogue brokers at the firm, as with doctors, lawyers, CFP’s, and even policemen.
And after 20+ years at the firm, I’ve yet to have seen the rates/percentages/fees mentioned, but unverified, here.
Keep in mind, you get what you pay for, folks. If someone says they only charge a flat fee, they have no “skin in the game” to make your account worth more, or to lessen the downside. They just collect their fee.
A quick question: if you were charged say, a 1.5% fee, what do you keep of the balance? I’m going to make a guess: 98.5%?
Awesome response and appreciate all the facts. Been with EJ for over a decade and often see articles like this that make me wonder if I am paying too much….thank you!
Go to Edward Jones and an old saying applies. A fool and his money are soon parted.
At Edward Jones the planning is what you pay for. A good financial advisor will seek to understand what is important to you. He or she will build a personalized strategy to help you achieve your financial goals and will partner with you throughout your life to help keep you on track.
I’ll try to make this simple and it applies to every financial company out there, not just EJ. In todays market environment, one should only expect 6-8 percent returns when planning long term, i.e. retirement. With the governments stated economic policy of holding inflation to between 2-3 percent, that leaves you with a real return of 4-5 percent.
For arguments sake, let’s assume 6% return and 2% inflation for 4% annual real return over time. If you are giving away 1% in the form of an asset under management fee, that equals 25% of your returns for the year. On a $1 mil account that’s 40K real return – 10K in fees, year in and year out. For those that believe this is a reasonable arrangement, I wish you luck.
For my money, throw it all in one of the Vanguard LifeStrategy funds based on your own risk tolerance. One fund to rule them all. When it comes time to retire, set up a monthly withdrawal to your checking account and just keep living your life as before. This method is based on the KISS principle of investing (Keep It Simple Stupid).
Yeah, keep it simple. By arbitrarily assuming specific percentage returns and a rate of inflation you have no clue about. And then trust the Vanguard LifeStrategy fund to give you proactive advice about your financial situation, taxes, estate planning, and long-term financial goals. Great idea.
That fund you mentioned is 9% YTD my Roth IRA through a FA I pay 1% on is doing 15% after fees.
So yes I will gladly pay 1% to get an extra 6% in returns lol.
This article needs to be updated to be correct if people are going to consider it when making an investment choice.
Jones advisors are fiduciaries under the new laws rolling out this week. They have always been encouraged to follow that standard even when it wasn’t the law.
If you pay a management fee of 1.35% to invest you DO NOT ALSO pay annual account fees or stock investment fees.
The ongoing fees built in to mutual funds are set by the mutual fund company and exist universally wherever that fund is held – 401k, at the mutual fund company or in a brokerage account such as Jones.
The cons provided are not accurate. Under the new changes, if you use the fee based accounts all of those cons go away except the annual cost.
However you are getting a personalized CFO for your family for that cost. We tip 15-20% or more when we eat out but people balk at 1-2% to manage your wealth. As long as your individual advisor is doing their job that should easily be made up by the flexibility of the new account.
Melissa C,
I assume you work for Edward Jones? The annual costs is a big con.
1-2% annual fees are high by most standards. In order to just break even in your annual returns, you must at least equal the fees. In this low rate interest environment, that is a much harder feat. More importantly, does all Edward Jones advisors add 1-2% alpha in their returns? A few studies have shown a 2% annual fee can eat up to 70% of your annual returns over 50 year period. I’m not against an advisor making money but it isn’t the best interest of our readers to say paying over 1% in annual fees is a ‘good deal’, when it simply isn’t and they are cheaper alternatives with similar service.
“If you pay a management fee of 1.35% to invest you DO NOT ALSO pay annual account fees or stock investment fees.” Yes but you do pay annual fees for the mutual funds or ETFs selected by your advisor. What matters is the ‘all in’ cost.
I half agree with you both.
Yes, Larry is right that you will be paying any ongoing expense ratio fees associated with the mutual funds you purchase. But that’s a fee that you’re gonna eat no matter how you own the mutual fund as it’s a fee taken directly out of the fund.
One thing that I believe is glossed over in the article is that within EJ (and most other) fee-based accounts you pay 0 up front sales charges on mutual funds. I understand that this is in exchange for the 1.35% you may pay annual, but it doesn’t tell the whole story.
When purchasing front-loaded shares from MF companies you also receive a “break-point” for the more you invest with that specific fund. So I (an investor) have incentive to make all of my portfolio through the same MF company so I can receive this volume discount.
If I have a fee-based account, I’m not paying that up front sales charge anyways but I’ll still get the volume discount for dollars invested in that account as a whole. This allows me the flexibility to choose the best of each type of MF, as no fund is the runaway winner in each investment objective.
So now instead of having:
American Funds Growth
American Funds Balanced
American Funds Income
I can have
Hartford Funds Growth
American Funds Balanced
Franklin Templeton Income
Essentially, this allows you to choose the best MF in each category, instead of being incentivized into putting everything with one MF company that may be lacking in certain areas. This effectively consolidates breakpoints.
I would also question the “similar service” assertion. Jones doesn’t have account minimums to have a physical advisor, and the local branches mean you’re not calling a 1-800 #. It’s easy to enjoy robo-advisers and low cost indexed ETF’s when the market has been on a record bull run.
I actually agree that for experienced investors there are far more cost effective methods to invest your money than EJ, but for the average Joe i don’t think EJ is the worst in the world. I say all this as someone who has money outside of Jones, but many family members who swear by them.
If the market returns 5% a year on your investments and you pay 1%, simple math you are paying 20%, One percent compounded is HUGE over a lifetime of investing. Go with Vanguard. Vanguard is own by it’s investors. With their simple online program it is so easy to do it yourself. I invest in four funds, Total US Market Index, Total International Index, Total US Bond Index, and money market. World diversification. Choose an asset allocation that you can sleep with at night. Vanguard’s customer service is fantastic.
No offense, but if you’re getting a return of 5% a year for your entire lifetime, you’re doing investing wrong.
The problem I’ve had with EJ is that they consistently underperform my accounts at Fidelity, Schwab and Vanguard and they have the highest fees, 600% higher. My advisor is a nice guy but this service is just not for me.
Thank you, Melissa, for your breath of fresh air. Yes, to those who want to trade free willy nilly, do! Yes to those who want to put all your eggs in one basket and hope they don’t crack, please do! Diversification with a Board of professional financial brokers and advisors with EJ may not pay you back all of your 100% profit you would make doing this on your own. What you gain for your 1.35% flat annual fee is a decent profit. If people expect to get something for free, I hope they get what they want. I’m sure there are plenty of who do. I know at EJ, my portfolio has 1.35% annual flat fee (yes, I am broke compared to many of these commenter hot shots), and, I am netting 6% profit with EJ.
The cold hard fact is Edward Jones is very expensive and doesn’t provide great service if you don’t have very much money. A successful Edward Jones advisor makes hundreds of thousands of dollars per year managing the financial affairs of several hundred wealthy households and their time is extremely valuable. To get a piece of that time, you have to pay. If you have money (~$500k+) you will probably get good service and the fees will most likely be low to moderate and competitive with other similar companies in the industry. If you don’t have much money, it is going to be very expensive, because you are trying to compete for attention with people who have a lot more money, and pay a lot more for the advisors time than you do. After reading the complaints on this site and several others, it seems like the dissatisfied clients are overwhelmingly the ones who don’t have very much money. That is just the nature of the business.
Nice cheap shot there. So it’s the “poor” clients who are complaining? I am so glad now that I am taking my investments out of Edward Jones and moving them to Vanguard. I see from this rude post, from an Edward Jones salesman, that I’ve made the right decision.
Yeah, it is mostly poor clients (both literally and figuratively) who are complaining. Most people who do business with Edward Jones are happy. Their customer service metrics are all very good. It isn’t “rude” to acknowledge that people with more money get better service. They also pay more. If someone is paying you $10,000 per year in consulting fees, and another person is paying you $10 per year in consulting fees, who are you going to serve better? If your answer is “I would serve them both equally” you are a liar or an idiot who has no clue about how businesses operate. Edward Jones is a business. They serve people in their niche very well. If you aren’t in their niche, complaining about it isn’t going to help you and it’s not going to hurt them, because most people who are in the niche can easily see you for what you are: not ideal.
Lots of wealthy clients are not happy with Edward Jones. Their business model is going away. People can invest online now and don’t need a broker. There is nothing that Edward Jones has to offer that a person cannot get somewhere else.
The brokerage business in general is going away. That is why Edward Jones (and the industry in general) has shifted away from investment sales and toward planning. You hire Edward Jones because they have an established process to create a personalized strategy to help you reach your financial goals. They partner with you throughout your life to help you on track. You are correct there are other firms that do this but they are equally expensive.
You aren’t going to do business with a successful financial advisor who is good at what they do for free, or cheap. You can get someone who is not successful who works in a cubicle at a call center but then don’t be suprised when the quality of service is really low. You get what you pay for.
I find all the article and comments irrelevant to my experience with EJ. I opened an IRA with EJ in 2002; all in American Funds mutual funds. They charged .75% upfront to manage my money. The fee was based on the amount of money I was giving them to invest; higher fees for less money. I haven’t paid any additional fees to EJ. My investment advisor does get money from American Funds, but not me. Over the life of my investment, I have averaged 7% per year. Since I’m not greedy, this works for me. I’ve had the same advisor for 14 years.
I recommend two websites: morningstar.com and feex.com
Go to morningstar.com and get a Quote for your mutual funds. Then visit the Expense tab and look under “Maximum Sales Fee”. If anything is listed under Initial (front-end load), Deferred or Redemption (back-end load), you ARE paying a commission. Then sign up for a free account at feex.com and add your Edward Jones account (or any other account where you have mutual funds or ETFs). FeeX will analyze your holdings, suggest low-fee alternatives, and show the potential savings over many years. I use both websites to analyze accounts for friends and family. Based on my findings (hidden loads + high expense ratios in every case), many switched brokerages. For mutual funds, I recommend Vanguard. For ETFs, any low-commission broker will do. I favor Schwab.
You need to study your accounts better. You paid at least 2.5% upfront for those American funds,. It just doesn’t show up as fees anywhere. Drill deeper.
Edward jones Advisory Fund is by far the worst investment I have Down almost 6% over the last year.
Just transferred IRA from Edward Jones to Vanguard and of course Jones slapped me with a $135.00 fee. Vanguard $0 for in/out transfer. So done with Jones, wish I’d kicked ’em to the curb years ago.
I’m amazed when people think Edward Jones is a viable alternative. Out of the 11,000 branches out there, there might be some good “advisors.” I have a sizeable inheritance (now not so sizeable because of Edward Jones’ churning.) I have been through four “advisors” in the last year, including our trusted family advisor. Either I am treated differently from most clients, or Edward Jones just is not a good bet.
These people aren’t financial advisors. They are pushy salesmen with an agenda: to sell Edward Jones’ products or bust. They do things I consider criminal, or in any other industry would be considered criminal. My original advisor took me out of mutual funds that were doing well. He then charged me $30,000 to put me into some new mutual funds, all without my knowledge. Then, because he would no longer talk to me, I moved over to another “advisor.” This guy was an out flim flam person. I won’t go into what he did, but he sold me some stocks I didn’t want. (Edwrad jones chargest a 2% commission on individual stocks.)
My third advisor told me he was going to selll all of my assets because I refused to buy an annuity fruom him. So, I moved to a fourth. He is horrible, calls me every day when he has something to sell. He once called me in the hospital. He lies through his teeth. I recently asked him to sell an asset. He refused.
I mean, how does Edward Jones survive???? Their advisors are crooks, out to cheat people. It’s incredible Meanwhile, I have lost a sizeable portion of my investments. Now I am panic-stricken. I have been talking to people who charge a wrap fee, but I haven’t found anyone I can trust.
I’m starting to move my assets to Schwab. Hopefully they will be better. I think the problem is that I am a single woman, somewhat older, with no one to help out.
I would recommend opening a Vanguard account and put together your own portfolio of low-fee mutual funds that fits your risk profile. Try to learn some about investments and be responsible for your own finances. Don’t rely on an advisor.
Pay a visit to PaulMerriman.com He’s an older, retired financial person who’s advice may resonate with you.
Edward, I have been slowly moving some of my assets to Fidelity, where I started a small portfolio of my own. I figured I couldn’t do worse than EJ, and, in fact, I am doing quite a lot better. I am getting market returns. I simply put everything into low-cost index funds and some high-dividend-yielding mutual funds. I’m happy with what I’ve done. I feel that, to proceed, I would need to get some kind of expert involved. I wish I could find someone I could trust.
Not to add insult to injury, my last part of the EJ saga is almost the worst: my advisor gave my account (worth more than what most people have) to a trainee who doesn’t know how to even make trades. I could write a book about the pitfalls of investing with a firm like EJ. It’s too bad there is such a low standard for financial advisors. Even a novice like me can do better.
Very Disappointing
If you want to do business with Edward Jones, and don’t care about your financial advisor, the company might work for you. After 14 years, my advisor reassigned me to someone in his office (someone I did not like) and refused to return my calls when I wanted to discuss my concern. Guess I didn’t have enough money in to rate his attention. That’s loyalty for you. Be aware that this is Edward Jones’ policy – they can move you around from advisor to advisor without your permission or consent. But ignoring my inquiries (both by email and phone over a 2 week period of time) – that was nothing short of rude.
I was done the same way. My advisor now wants to move and sell. Exercising fear tactics doesn’t work with me. I have Americsn Funds and am pleased with it. My advisor wants me to move it.
I’ve been dropped by two EJ advisors and shuffled along to someone else. I was notified by mail and not a personal phone call. After losing money with mutual funds, I switched to CD”s on the advice of my original advisor. He dropped me and I went on to another advisor who recently dropped me. I guess there is not enough to be made on CD’s. If you don’t have a large portfolio, avoid EJ.
I just met with an edward jones financial adviser yesterday – the quote that I got was 5.75% fee to purchase a mutual fund… We were talking specifically about setting up a roth IRA, but I am pretty sure she said the 5.75% applies to basically all purchases of mutual funds. Any help making sense of that, based on the 2% quote mentioned in this article?
Thanks!
My advice: Vanguard low-fee mutual funds.
There are two ways to do it the 5.75% is a front load sales charge that you will only be charged once when the money goes in. The 1.35% Annual fee is for guided solutions or advisory solutions. If you are in a good mix of funds and stocks you will out perform those “low cost vanguard funds” even after the fees.
Just finished a complaint process with Edward Jones, of course they found themselves in no fault. They cost me thousands in horrible customer service and bad advice. IROCC was even involved, and they say not the first complaint against this company. Steer clear of these thieves, it will cost you a lot more in the long run. They should be ashamed of themselves. Ripping off the public and not caring whatsoever.
Edward Jones is, by far, one of the most ethical firms in the industry. Personal financial success is directly correlated to asset allocation and risk management. It appears that a few of these responses are due to either a lack of understanding regarding market volatility or fee structures. Cheap is not always better as index funds are market- weighted and more susceptible to “bubbles”. I do sometimes use some as a core but would never use entirely. Too many intelligent people are prone to chase returns and, in the end, buy high and sell low. Ironically, this error presents itself without prejudice. Most people need an Advisor and many are wise enough to admit it.
Anne,
Did you miss this headline?
Edward Jones to Pay $20 Million for Overcharging Retail Customers in Municipal Bond Underwritings. FOR IMMEDIATE RELEASE 2015-166.
Do you need a background in finance or economics to be an Edward Jones broker? NO
What do you need? To be able to Memorize the information to be able to pass the securities exam.
Edward Jones Corporate will tell you how to handle your client’s money…. (see headline above)
All Corporate wants their financial advisor’s to do is to bring in new business and meet the required sales and marketing call goals. And of course, don’t worry about that pesky fiduciary duty to your clients, you don’t have one! See Jones’ corporate and partner structure for more info…
Do the research on your broker:
https://brokercheck.finra.org/
Edward Jones is one of the worst possible brokerage firms around. The have developed a great strategy and local ground game. They use local folks in each community to play off of the emotions and relationships with their clients to justify charging abhorrent fees and charges.
Use a low cost managed account if you need assistant and financial planning advice. If you want a relationship and friendship, go get some friends and leave your finances out of the picture.
“Edward Jones is, by far, one of the most ethical firms in the industry.”
That is 100% false. Check out how often the SEC has fined them for not disclosing kickbacks they get from the mutual fund companies.
“Cheap is not always better as index funds are market- weighted and more susceptible to “bubbles”.”
This is also 100% false. Index funds have outperformed actively-managed funds by a pretty large margin. Fees are everything when it comes to mutual funds. No one can tell what the future holds, so the only thing you can control is cost. And higher fees, over the years, add up to a huge difference.
Anne, I wish I could agree with you.
My family made a lot of money with EJ. So they were good from that standpoint.
The problems came after my dad died and I lost my family EJ advisor.
I know I’m not great working with FAs. My mom did all the interactions with our family FA. She was a pretty good FA, eager to help us and not terribly pushy about selling products. Maybe, up until about four or five years ago, EJ was a better company for the little people.
But now, they are horrible, pushy salesmen. It’s a wonder my portfolio has survived more or less intact. My current FA suddenly said he thought I was incompetent to manage my wealth because I told him to stop calling me day after day when he had something to sell. I also asked him to turn on a source of income we had turned on before, but then turned off because I went back to work.
Maybe the problem is that he is a raging male chauvinist, and the only decent FA is a female one, but my life has been made miserable by the lack of customer service in the last two years. (Note that my FA called me in a rage right after I transferred some assets to Schwab.)
I wish the EJ model worked for me, because I really don’t know how to get from here to there. Some times I think I have over a million in “EJ funny money” because I don’t know how much I would have if all the assets were suddenly sold, which one FA threatened to do.
I cannot recommend EJ. I cannot. I know they are considered a good firm, but, for the past two years, I have had nothing but miserable experiences with them.
Just stop your nonsense. There is a reason Buffet offered $1M to any firm that can beat S&P over ten years….you can’t. And “bubbles” formed for index funds? Your EJ advisory funds have performed HORRIBLY…Far worse than SP, and RUS2000. Plus, 1.3% annual fees and 2% on reinvested dividends. An EJ “advisor” could live off the fees from one wealthy client.
Let me put this plainly…EJ Advisors are parisites IMHO.
For being so ethical they sure spent a lot of money fighting the fiduciary rule. Also you might want to check on the “reverse churning” class action.
My friend n I both got sucked into Edward Jones both lost money. It was at the time the market was still going up. So happy we got out. The market has started to go down n im sure we both would of lost much more. All they say when the market go’s down is now is the time to add more to your account. Hell that would be every day. They will tell u that there fund have high dividend stocks in them but what they do not say is u do not get the dividend.
My wife and I use Edwards Jones as a CFP (Certified Financial Planner). Our agent looks not only at investments, but insurance coverage, various retirement funds, my wife’s small business, taxes, tax accounting, college account for baby and so on. In other words, my wife have a lot going on with entire money picture and need someone to handle it. It is too much for the young family to keep up with. Our agent checks in 4 times a year. Again, full service brokerage is for someone that just does not want the extra hobby of managing their money. It is too time consuming and I would rather do something else than read Money magazine, WSJ and watch PBS Money Hour. We look at this full service as retirement planning for the long haul and money management for the entire family. The cost to us is worth it and in this sense, they do a great job. They have to get paid somehow.
No offense but the CFP is basically a designation to get more sales, it doesn’t make them any more qualified in the thing that matters, which is investment management. Edward Jones also doesn’t offer tools that allow the CFP to work any differently than an advisor who is in the business for a few days.
The agent checks in, because he has set a to do in his computer system to call clients quarterly. You are on a list to either get sold an investment, upgrade to advisory solutions after 2 years of being in a brokerage account, or other things to deepen the relationship. (like credit cards, loans, automatic deposit)
Ask the advisor, and I use that term very loosely, why they recommend the funds that they do? (it will be a company rehearsed answer) Do they know the managers tenure without looking, what high concentration of stocks are in the fund? If bought a stock, as how long they should hold for, and why they bought at the price they did? (they will just quote Edward Jones research, which you could do on your own)
They teach advisors to use bullet points on anyone who questions the investment selections in such a manner. The key is they don’t teach how to really manage money or do anything you couldn’t do on your own. You get sold on the “process” of Edward Jones, which makes everyone feel good, but does nobody any real good except for the company, and the advisor, in that order.
New technology makes financial advising easier for the average person. Online robo advisors such as Betterment, Wealthfront, FutureAdvisor, etc. make the need for high fee charging firms like EJ a dinosaur. If you want/believe in the face to face value of having an advisor to talk to then pay the higher fees.
robo advisors and their portfolio algorithms have nothing to do with financial advising.
The above arguments and comments highlight the problem with the financial education and perception of the mainstream. In this “back-and-forth” between everyone in this thread are not even being discussed.If you people are going to argue about fees and performance, and passive VS managed, and DIY VS an advisor, you must understand that there are simple, timeless truths at the foundation of the argument that you are failing to integrate here.
1. Regardless of the position you take on active VS passive management, the real issue is that MOST human beings cannot handle the volatility that comes along with any investment that (for example) tracks the equity markets (S&P 500 we will say) and yields a similar long term annual average rate of return. Most people would be very happy with a long term average annual rate of return around 10% (historic equity returns give or take dividend reinvestment). The problem is that people CANNOT deal with the inherent and recurring temporary declines, even though those declines are simply a means to an end of their long term performance. THEY CAN’T HANDLE IT. Humans’ strongest emotion is fear and fear is not navigated with rational thinking. How many people do you think piled into the technology euphoria in the late 90’s (not to mention, companies with no earnings) only to soon witness a collapse of that particular sector and then decide to sell what they owned at a staggering loss of 40, 50, 60%, etc? I’m quite certain the 1% “cost” to a trusted advisor who kept his/her clients’ allocation and emotions in check before, during, and after that time period ends up being extraordinarily valuable over the long run, even if only to navigate just these recurring fearful times. How about 2008? Even most people who owned even a quality portfolio of investments who didn’t have a proactive reassuring partner in a good advisor began moving money into cash after the majority of the downturn was behind us. Once the S&P500 doubled and tripled from the lows, humans then felt comfortable adding money back into equities. They thought the sky was falling and that the world was ending… just like those before them had thought so many times over the history of the markets (who were wrong every single solitary time, mind you).That’s human nature… and that’s why people don’t achieve the long term returns that they SHOULD, regardless of investing in index funds or managed funds without a good advisor… even if only to keep them from making disastrous mistakes.
2. The second part that no one can ever seem to take into consideration when arguing fruitlessly is that any investment account/portfolio/mix/allocation/plan… whatever you choose to name it… should have one sole purpose: to reach the goals that those human beings have over the long term (ie retiring at age 62, living until 90, spending $5000 per month in today’s dollars and increasing that by historic cost of living increases annually… not to mention funding some of their kids’ or grandkids’ education, addressing potential medical care costs, navigating a dynamic tax environment, understanding the impacts of social security filing strategies, understanding the impact of guaranteed income VS the reliance rate on their investment portfolio to maintain their lifestyle, and so much more). Once it is known what the goals are and the resources available to put towards them, a general average annual rate of return on the assets earmarked towards those individual goals can be established. For some, a 6% average annual rate of return is sufficient over the long term… for others, 8% may be required (unless working longer or spending less is an option they are willing to budge on). At the end of the day, if your long term goals are attainable with a 5% AARofR, why would you want (or need) to put yourself through the unnecessary emotional stress that an investment mix designed (by historical measures… and notice I said investment MIX not investment selection) to provide an AARofR of 9% will inherently put you through? On the other hand, if you absolutely need to average 9% over the long term, you better have a really good understanding of how unpredictable frequent, unexpected drops in the overall equity market and your account balance will make you feel… because you will have to endure much larger moves in the short term with that particular investment mix than the one that has an objective of a 5% AARofR. It is what it is. There is no magical investment ferry who will make your investments perform at some “outperforming” level (outperforming what, by the way?). I haven’t even touched on how maintaining the proper allocation (mix of stocks vs bonds AND exposure to the different asset classes among those) is crucial to maintaining your proper investment mix to reach your goals with the least amount of volatility (some call this “risk”) in the interim.
So, once a good advisor articulates to you the timeless, simple truths of 1 and 2 above, 1% per year to get you to where you want to be in the most efficient way possible shouldn’t sound too bad. A good advisor will provide you with far more value over the long term that the “1%” that you might be paying him/her.
Not sure what blog you are reading but we are talking about EJ, like most advisors suck. I have tried several.
Get educated and do it yourself with a discount firm like Vanguard.
Absolutely correct that any firm can have scoundrels. The culture of a firm can lean toward or against misbehavior. As a 25 year EJ vet, I can tell you our culture leans against misbehavior.
No matter where you put your money i.e. stocks, mutual funds, bonds, life insurance, annuities, etc etc etc etc, you always pay the piper……Over the last 20 years the craze has been no load index funds all the way……..now the tide is turning towards active management funds……….Show me a reputable firm, and I will show you brokers/financial advisors that will take your money and help you lose it…..Be it Edward Jones, Raymond James, Merril Lynch Wells Fargo etc etc…..
Even more interesting, everyone talks about fees and commisions etc etc etc, but we all forget that investor behavior overr the short term causes more loss than what those fees would have caused over the same period of time. Behavior and good research and sticking to a principled plan of proper asset diversification and proper rebalancing of retirement accounts will always win over any fees. The fees and expenses that an investor pays better be worth what the returns are given the context of the market etc etc etc……….Edward Jones is a good firm and has some of the best long term investors in the market today.
I agree with the pharmacist. Referrals from those you trust, with nothing to lose or gain if you do or don’t follow their advice, is the best kind of referral.
2% in fees will slash your account by 65% over a 40 year period. John Bogle calls it the tyranny of compounding cost overcomes the miracle of compounding interest. I’d stick with low cost passively managed funds. It’s been proven active mutual funds underperform their benchmarks over and over and over. Why pay all the fees for sub part performance?
Edward Jones will tell you anything and everything to get your money and your children money. At the end you lose. Either the market is up and you make less than you should or the market is down and you lose more than you should. All Edward Jones cares is they are making money and leaving the risk to you.
ARE YOU NUTS?
EDWARD JONES IS A GIANT RIP OFF
STAY AWAY FROM THEM
THEY ONLY WANT TO PUT MONEY IN THIER OWN POCKETS
THE FEES ARE WAY TO EXPENSIVE
STOP LYING TO PEOPLE
GO TO VANGUARD MAKE AND KEEP MORE MONEY
A good advisor can make you 1% in a single day, so why worry about 2% over a year? Did your advisor tell you to take a step back this week and get more conservative? My EJ advisor did!!!
If they don’t get you results OK, but Jones seems to outperform in down markets regardless. Great research department. Look at their BUY rating stocks vs. any other making recs.
Most of the people making comments above are not legally allowed to give advice per Series 66 regulations, so please take their advice with a grain of salt, and don’t give your money to a cheap, underperforming marketing guru like Vanguard.
History has proven that over time, how many fees you pay is the number one determining factor in returns achieved. Don’t be fooled. Read The Book: A Random Walk Down Wall Street. The book was originally written in the 1970’s and has been updated as time has passed. It’s damming evidence against those who would have you believe paying high fees in exchange for “expert” management (fundamental and technical analysis). It is a lost cause. Passive funds like Vanguard consistently outperform these fee laden mutual funds that the Legion of EJ advisors are pushed to sell. This is fact not opinion. At any given time, 75% of passive funds will outperform. Over time, the number is 100%. Hence the name of the book. It’s completely random and one mutual fund doing well 10 years later is at the bottom of the heap. Don’t be fooled by the slick marketing of EJ. Their high fees are guaranteed whether you make money or not.
Fees are not the number one determinant of returns. It is asset allocation.
“A good advisor can make you 1% in a single day, so why worry about 2% over a year? Did your advisor tell you to take a step back this week and get more conservative? My EJ advisor did!!!”
You can’t time the markets. An index fund can also return 1% in a single day and they often do. Edward Jones is a huge rip off. Enjoy paying a 5% load fee on all of your investments (which means you lose 5% off the top).
After leaving EJ and going to Vanguard, I will tell you the difference is huge. After using both Web portals, the lack of info available at EJ is obvious they don’t want you to get too much info.
Vanguard gets very deep.
EJ agents are just insurance salesmen looking to line their own pockets.
Lost a lot of money at EJ 2 ways, heavy fees and bad funds.
Hope this helps someone before they do business with EJ.
Very few managed mutual funds outperform total stock market index funds over 10+ years (>3-5%). Vanguard’s Total Stock Market index fund has had an annual return of 9.63% since inception in 1993 diversified over 3,800+ stocks with an annual expense ratio of 0.17. When you add in the 1-2% annual fees charged by most managed funds, it’s difficult to match the performance of a broad based index fund.
People have mentioned that the 1-2% fees don’t make that much of a difference. However, if you run the numbers on an investment calculator over a 20 year horizon the variances are staggering.
$100,000 invested at 9.50% in Vanguard’s Total Stock Market Index Fund for 20 years results in $614,641
$100,000 invested at 9.50% in a similar managed fund less 1.5% in annual fees for 20 years yields $466,096
The difference is $148,545 or about $7,500 per year. Seems like a lot of money to spend for financial advice especially when very, very few managed funds beat the broad market index over 10 year period. If you earn $50,000 per year in salary, this means that you’ll have to work three additional years to pay for that financial advice.
I’ve been with EJ for 2-3 years and the thousands I paid every year has always bothered me. Now EJ is having to have a fiduciary relationship with its clients who have IRA(s). This change has resulted in doubling the cost of fees.
I’m informed about investing but don’t want to do the work of it and certainly don’t have the computer tools that they use for asset allocation, determining how long your money will last, etc. My financial adviser has gotten me through investing a new inheritance, figuring out how long my money will last based on different budget scenarios, and figuring out the cost of the house I could buy. Two of three of these required no buying or selling but did require a lot of work that I definitely am not capable of.
Despite all of this I’m considering leaving EJ because of the fee increase and reading all the comments here.
Vanguard’s Total Stock Market Index Fund 2020 20.68% not bad……
My Managed Large cap fund ….2020 77.4% ….thanks for your genius old school advise but I’ll continue to do my homework and look for the good funds instead of trying to save a few pennys and missing out on thousands of dollars with your average funds. There are many of them out there.
But index funds are smarter than a Jones broker and an American funds portfolio.
Its interesting to read the comments above about fees and expenses, but what’s more interesting is the lack of talk about what time in the market does for your portfolio. I’ve learned a lot by watching others with their portfolios and their advisors and have watched how their value has grown because of the amount of time they spent in the market in good quality stocks, mutual funds, etc.
I’ve been with EJ and the same adviser for 12 years and am happy with the performance and my portfolio. Its done quite well, and now I’m moving into stocks from mutual funds. But keeping my mutual fund in addition to the stock for diversification.
I am moving from EJ after 10yrs. My broker recommended the managed investors acct, which I changed to. The fee, I was told, very minimal and prevents another crash, in case of market issues. So the last two months they have e lost me money. the kicker is they still take the fee. not just any fee they take the fee off the money I already have invested every single month. So back I go as they double dip. How can you charge me a fee on the initial amount I have, even when you lose me money? I called my broker to change back and it’s 2.5% to get back into the same funds I’m in, but unmanaged!! Now they’re going to take $7500!! Not me… I am out! Don’t go wth the managed account!
Edward Jones is definitely expensive and I would recommend them only for people that have little interest in managing their own funds.
Vanguard offers the lowest expense ratios of the major investment firms that I have found (0.19% vs1.08% industry averages). They have zero purchase and redemption fees on most all mutual funds. 171 of 188 Vanguard mutual funds have outperformed their Lipper peer group averages. If you invested $100,000 with Edward Jones and purchase American mutual funds at 4.5% front end load and an expense ratio of 1.0% versus a comparable Vanguard mutual fund at 0% front end load and 0.2% expense ratio and left it invested for 10 years. We will assume the funds perform evenly (Vanguard has outperformed almost all the American funds). The Edward Jones account will cost you over $20,000 more than Vanguard! For that amount of money people real should take the time to learn about investing.
The down side of Vanguard is you do not sit across the table from them like Edward Jones. However, they have their “concierge” service for account under $500K, “select” service for accounts $500K-$1MM, and “flagship” service for $1MM+.
I have dealt with both. Edward Jones was good for me until my representative retired then I found out what it was like to have a person (the replacement) who was looking out for themself and not me. Vanguard doesn’t call me with the latest “hot” deals, but they have provided a very good return on my investments at low cost.
So overall I agree with Jim Jones. However I do know people that are not very good with money and would be better off with Edward Jones than doing investing themselves…even though Vanguard makes it really simple.
Dale, I am transferring my iPad. Thx for the tip on vanguard. Do you use a discount broker and handle your own acct? Just wondering who u use if u do. Have a great day… Nan
Why would you pay 2% to a person that does nothing? They make money when you buy more and charge a 1.5% annual fee. Look into Vanguard, Fidelity, T Row Price, and other low cost mutual funds/ETF’s.
I was with EJ for 2 years and never got any sound financial advice from my broker. There is a good book out there called The Intelligent Investor, that talks about low cost funds, dollar cost averaging, diversification, and etc. It can get into the weeds a little, but it has good ideas for the common investor. I think you can get by with 3-5 index funds and not pay a financial adviser. What does financial adviser even mean? I think I’m qualified for posting this post, so give me your 2%. Your EJ FA probably has BMW or Benz, thanks to you.
EJ is a joke, and as long as you can count on your own hands and feet, do your own investing. Do a little reading and you can save your 2% annual fee, 5.25% front loaded funds, and not but junk funds that don’t even produce over the long haul.
Have been with EJ for 6 years they use to recommend that when you do start drawing on you 401 that you take no more than 5% now that’s down to 4% because they can’t grow your account I guess not with them getting 2% plus all the trades they do on your behalf in the advisory solutions account. I have really only recently got concerned about the fees when I started to study the statements. Am changing going to Fisher Investments lower fees less complaints and a good track record. And my money goes where Ken Fishers goes. Hate to change have been friends with advisor for years at EJ but it’s about the dollar.. I need it more than they do and it means thousands for me. Plus customer service very reluctant to answer a question always want to refer you to agent but they are not always available.
Fisher is a marketing shop. I much prefer EJ where I can walk down the street to see my guy. All in -I pay 1% including mutual fund fees.
1% fee + mutual fund fees means you are getting screwed badly.
Sorry Patches, but your EJ FA is not just charging 1%. I’ve dealt with EJ for most of my life and finally decided to educate myself. The actual fees charged at EJ are staggering and most are completely hidden. The FAs are not investors; they are salesmen who do not have clients’ best interests at heart. They are ruthless, in it for themselves and EJ, EJ should have gone under as a company a long time ago. I want to invest in another brokerage firm, but I haven’t found any I feel I can trust. For some reason, the problems at EJ seem much more acute lately. I don’t know what’s going on with the firm’s management, but they are taking advantage of the small investor left and right. All of their FAs flout SEC and FINRA regulations, big time.
Go to Vanguard, save a ton in fees and do it yourself.
Also try Jim Cramer Action Alert Plus.
Made a lot of money with him, he tells you what and when.
Can someone please explain to me how to identify the “completely hidden” fees that EJ charges? Where should I be looking ?
LOL, 1% all in. Better check that again.
If I sell a stock in my 401k and invest in another more productive will I be charged a fee
I like your thinking. I’d love to see the Fischer portfolio and what fees they charge. So we could really do a comparison. They say all the right things in the commercials but they never let you get a look under the hood until you move your money there.
They are iShares ETFs. ETFs of ETFs.
If you are Socrates, you should be able to figure it out. LOL
Agreed. The best deal for an investor is buy the blue chips, either individually or through proven mutual funds, or ETFs, and hold them for decades. If you do that, whether you paid $7 or 5.75% to get in, it really won’t matter. You will do fine. Check out AOA and AOR. Your broker probably won’t point them out to you.
What is AOA and AOR?
There are studies showing that investors do not get the return that various asset classes have returned, basically, because they buy high and sell low. A program that puts a discipline in place, automatically rebalances, and removes emotion from the investment decision is easily worth a percent or two to most investors.
The studies also show how financial advisors lag index funds (and essentially make the same mistakes). Those EJ locations are run by humans. It’s not (computerized) quantitative finance (like you’re implying).
Good advice. Get to know your advisor. If you are not communicating comfortably with your person, find someone else. I am a 20+ year Edward Jones advisor. The most important person in the relationship is you.
So as an Edward Jones advisor do you “give” clients to new advisors as my wife’s does? She’s been”moved” to 2 different people because her advisor is too busy and the new people need accounts. They explained that this is common at EJ. This is exactly why I would never do business with EJ again. The original advisor was marginal at best but I certainly don’t need a newbie managing my money.
Mike, Are you a broker or and advisor? There is a huge difference. One post you said “I am a 20 year plus veteran broker” then you said “I am a 20+ year Edward Jones advisor” I don’t go around saying I’m a CFP when I’m not so if you are a fiduciary over your client’s assets then you can call yourself an advisor. If you are a commissioned broker then you are a broker (salesman). But you are right that the most important person in the relationship is the client.
An element left out of this discussion is the integrity of your FA, regardless of the brokerage firm involved. If you are dealing with a crook, you will get screwed every time whether it be by EJ, ML, Schwab or Scott. The integrity factor cannot be easily discerned. Advice from TRUSTED friends or TRUSTED business associates can be of utmost importance in the selection of a financial advisor. Watch out for the smooth talkers and get to know your FA on a personal level and the trust factor will begin to show itself. If you do not trust your FA, “get the hell out of Dodge” sooner rather than later. As a 76 year old retired pharmacist, I have dealt with 5 different advisors with different firms and this advice is based on 50 years of hard-earned experience.
I am a 20 year plus veteran broker. Here is an anology I use. Say your car needs repair AND you know how to fix it. Then all you need is a parts store. But say you do NOT know how to fix it. Then you need a Mr. Goodwrench. The hitch, though, is knowing what you think you know .
No it is finding the right person to fix it.
Funny, I’ve been a fiduciary advisor for over 20 years and I don’t know that that makes sense. If you know how to fix it, drive to the parts store and pay $100 bucks for parts and get it done for $100 bucks and your time. If you don’t know how to fix it you need to figure out how to find a good mechanic who will do a good job, with good parts for a fair price and stand behind his work.
I guess that’s the difference between a broker and an advisor…..haha. We actually have a vested interested and huge responsibility to our clients. The more my clients know the truth about how I work they become more confident in what I do for them. Brokers do better when their clients are in the dark.
The adviser I have with Edward Jones has done a stellar job over the last 13 years!!! As for the so-called conflict of interest, I disagree, a financial adviser has two ways of getting paid, via comissions and sales charges, or a percentage of your total portfolio, usually 1 to 2% per year. Depending upon the size of the portfolio under management, the first is ultimately cheaper. As for the conflict of interest, if your adviser and you don’t see eye to eye, and you continue to stay with him or her, then its your own fault. An adviser is not the final say or word, your word is final, and if you allow an adviser to have that, then you have lost control over your investments. A good investor knows when to speak up and when to allow the adviser to lead. It is through a comfortable, trust worthy, respectful, professional relationship that solves this so-called conflict of interest.
Regardless of the firm its all about the adviser and your relationship to that adviser. If you see yourself knowing and understanding better than any adviser, then its pointless to have a financial adviser.
Lastly, the fees are not higher than average, actually they are cheaper!
You do realize that 2% per year eats dramatically into your returns?
See the PBS documentary where this is discussed:
https://investorjunkie.com/28084/retirement-accounts-flawed/
Larry, don’t confuse price vs. value. I don’t mind paying a 2% annual fee if I feel like I am getting my money’s worth. The question is, what are you getting in return for the costs? Is it access to otherwise unattainable money managers, daily portfolio monitoring, automatic rebalancing, consistent asset allocation, enhanced research by the portfolio team, etc…?? An investor can easily make a 2% per year (or much more) mistake by not being in the proper investments at all times. Two quotes to leave you with….
As Ben Franklin said, “The bitterness of poor quality remains long after the sweetness of low price is forgotten.”
Oscar Wilde — ‘Nowadays people know the price of everything and the value of nothing.’
so have u got your moneys worth since the start of this year. did they advise u to get out or r they running on the last 5-10 years of upward movement. U will understand more what they do not do when the market starts to shake.
Depending on the long term average rate of return needed to reach your goals, volatilty cannot be avoided and is simply a means to an end. The historic annualized rate of return on equities is about 10% (which really doesn’t mean anything since most people don’t need that kind of return to reach their long term goals which also means they don’t need to deal with the greater volatility (ups and downs) that an all equity portfolio will entail) The average investor’s rate of return is about 5%, mostly because they make terrible emotional short term decisions and try to time the market which is consistently impossible. The only way to lose money is to sell investments when they are down. If one does not understand that temporary, sometimes large, declines will always exist then he/she either needs more education on the topic. Temporary declines cannot be avoided over any long term cycle. But it isn’t the declines that affect our returns, it’s how you react to them. ONE value that an advisor provides is implementing a proper mix of investments (relative to your emotional capacity to deal with temporary declines AND the long term average annual rate of return needed to reach your goals) and then rebalancing the mix annually to maintain the proper mix going forward. Getting your money’s worth has nothing do do with your portfolio’s value not dropping during market corrections. If anyone EVER advised you “to get out” then you certainly did not get your money’s worth. Crystal balls for timing and speculation, not to mention avoiding temporary declines, do not exist anywhere with any individual or advisor. If one assumes that this should be any part of an advisor’s value proposition, he or she is gravely mistaken.
U got to be joking. I own a seat at the CME an make my money by getting in an out most every day. I tried Edward Jones an as the market went up over 1000 points it moved up very little when the market went down 500 point I was at a lose. If one is never going to tell u when to move you money out then you are not getting you moneys worth. Are you up from the begging of this year? would you not want to of sold your account into a money market then reinvest 2000 point lower? According to you that would be no. Take the lose n wait until the next bull market 10 year from now. Ask your adviser where the dividend go’s from the dividend stocks in your fund. Not to you.
That’s very true, and that’s why I prefer the commissions than the 2% a year. No matter what your returns are you are losing 2% every year plus any expenses if you are invested in mutual funds and efts. So in a down market of 10% you would lose an additional 3% or more.
I don’t think anyone would want their being eaten by an advisor that’s really not looking after your best interest because he’s making a killing off you and your high net worth portfolio. In actually think the percentage payment to an advisor is more of a conflict of interest per say. Regardless of their performance they get 2% a year from you.
I’d rather pay commissions because it would encourage buying in times when everyone else is selling and not buying when everyone else is being greedy and buying like ravenous animals! Make those commissions look even cheaper because of when you made those investments into your portfolio.
Edward Jones charged us 4% in one year. I’d never do business with this firm again. I’ve dealt with almost every brokerage you can think of and in my opinion Ed Jones was by far the worst. Avoid.
This is another OPINION and what really matters is your NET result. Simple explanation: If you pay Vanguard .10 for an index fund and the fund gets a 10% 1 yr return you net 9.90%. If you pay an advisor 1.25% and a fun .85% for a 2.10% fee and the managed fund he researches and picks for you does 79% that same year you will net 76.9%. I’d way rather pay a guy 1.25% if my money makes 76.9% in one year. Plus good Fiduciary advisors don’t have 1000 accounts like Jones clones do. There is no way to actively manage large numbers of accounts, you have to use boring stale models that have very average returns. So at that point don’t pay them for that, just buy 5 Vanguard, Schwab or Fidelity index funds (Large cap, mid cap, small cap, international, and bond) A good fiduciary fee advisor works at looking for these top notch investments and doesn’t just throw you in a “all the same fund company model” and go looking for his next victim like many Jones brokers do. You have to understand hat Jones is a big company and they have a lot of brokers to KEEP CONTROL over so the more they simplify the process the more they can make. These big company processes never favor your returns, they favor their returns. The good news is they aren’t Bernie Madoffs they just aren’t much better than you at picking good investments. Ask your broker or advisor to show you the exact portfolio they will be using for you and if all or most of the funds have the same name….RUN. They aren’t worth paying. No one fund company is good in all categories just look at any top fund list and you’ll see all different names as the top performers. it should be your advisors job to go find those. That’s what you are paying them to do. I’ve been doing this for over 20 years and there is only one commercial that tells you the truth….and its not vanguard. Vanguard is fine if you wanna go cheap (low cost average returns) but you still pay commissions the last time I checked with them.
Over the last 13 year the market has gone straight up. Did they advise u to get out.
How has it done since the start of this year? U would of made more just buying the index 13 years ago a lot more.
This is contradictory. First of all did you forget about the 49% intrayear decline in 2008, had you owned that index? The market is down 7% this year so far and you are mentioning “getting out”. If you had bought the index 13 years ago in 2003, what would you have done in 2008? This is the part people cannot grasp. Unfortunately most people bailed once most of the decline had already happened. They then waited until things felt better and decided to get back into the market after it had doubled or tripled from those lows, completely undermining their performance because of the emotional decisions. Two points to this… 1. Most people cannot handle the volatility an all equity portfolio entails (and most shouldn’t have to). 2. Declines are temporary and unavoidable and are part of your overall long term average rate of return.
Well did Edward Jones advise you to get out in 2008? An yes if you own the index 13 years ago u still would be way ahead of any Edward Jones funds. It just take a simple click to see where the market was 13 years ago n where it is know.
Joe, your investment style may work for you… but Tom is right in general (though there are cheaper ways to manage a buy and hold investment than EJ.) Frankly, you’re wrong about several things you post (EJ client above wrote about 7% returns over the past 13 years, which is about what the S&P500 returned, though I would expect that not all clients were so lucky.) People who day-trade for a living are rarely successful at it. Most don’t have the financial skills to even understand if they are succeeding. I
Tom, paying 2% or more to an advisor really hammers long term returns. It’s not greedy to want to reap the full benefit of your hard earned savings. You can invest in Vanguard for about 0.15% if you go for the lowest fee funds (.010% for your plan, .005% for your funds). Small investors will also have an annual fee of $25 or so, if I remember right. Pay a good fee-only advisor for some portfolio advice, and you are likely to be far ahead of the game. EJ may make more sense if you need the full range of their services, are really poor with money, and/or don’t want to do the research to find better options. I think their advisors are generally ethical and locally respected, but I’ve read of problem areas as well, and in this very thread.
Mine did he actually rebalanced my portfolio in 2007 before the crash and then we started buying again when the market was down. I actually beat the market by avoiding some of the downturn and buying low. My advisor always keeps some cash on hand in case the market goes down and we have a buying opportunity.
Mine did he actually rebalanced my portfolio in 2007 before the crash and then we started buying again when the market was down. I actually beat the market by avoiding some of the downturn and buying low. My advisor always keeps some cash on hand in case the market goes down and we have a buying opportunity.
“The adviser I have with Edward Jones has done a stellar job over the last 13 years!!!”
How have they done versus the market over the past 13 years? I am guessing far worse, especially when adding in the 5.75% load fees (that come out of your investment)
Socrates,
I agree with your points, we know and trust our Ed Jones people like family. They are very educated and of impeccable character, however after years of work with them we are retiring and may not need the expense of such. Does it take the same smarts to withdraw as it does to buy securities? This is my question at this point.
Commissions aren’t cheaper. Many investors take the load (for example 5.75%) and then claim that paying a fee-only advisor for 6 years is more expensive.
For one, the loaded funds also have higher than average expense ratios. In addition to the expense ratios, these funds often engage in “soft dollars”, where the mutual fund company intentionally pays more for trades in order to receive goods and services for a brokerage firm. These costs are not required to be disclosed in expense ratios. Estimates put transaction costs at about the same level of expense ratios, thus doubling your annual fund fees.
So, the real comparison is:
Option A: Buying a 5.75% front load fund and then paying 1.4% in yearly expenses. And having to be on constant guard against a commission-based advisor who will sell you an annuity the first chance he gets;
or
Option B: Hiring a fee-only advisor for 1% in annual fees. That person, because they are likely more skilled and definitely more ethical, finds you funds that charge .05% TOTAL. So, you are paying 1.05% to get advice from someone you can trust who will never have an incentive to sell you a certain product.
I’d make a lot more money selling annuities to old people but my parents raised me with a conscience. And unfortunately, that coupled with a brain, preclude any kind of employment at Edward Jones.
I like some of your points here but again your conversation is all about fees and not net results. Net result : Return minus fees = net result. We invest to gain NET results not to avoid fees. There is a balance between how much we pay for how much we get. My holy grail solution is to find two or three advisors (don’t tell them) and split your money three ways and let them manage it for about 3 years and listen to their approach and services and then have them use the same model 90/10 or 80/20 or if you’re older maybe 60/40 depending on your situation. Between the three advisors they should pick similar models. Then be specific on which model you want them all to use. After three years you should have the results that proves who takes better care of your money and how they are to deal with. Don’t get too touchy feely with them this is business, you have plenty of friends your advisor relationship needs to stay mostly professional. I understand how easy it is too get close to your advisor, my clients are like family but I always remind them I have to earn and keep their business through my daily management.
I’m confused by your comment. I feel like you are defending EJ but then in your last sentence you stated that your conscience coupled with a brain would basically make working at EJ not an option for you. Am I misreading that?
Um you said a good investor knows? If I was a good investor I would do it all myself and save the headache and cost of hiring a professional. You pay the fee for the supposed expertise that you otherwise don’t have. In my case my magic 8 ball ha betteruck than this Edward Jones guy. Moving my money out.
sorry but the cons outweigh the pros for me. No online trading it would defeat the purpose for me. I guess you really have to look at how you are as an investor some people may want someone to do everything for them. The fees I couldn’t deal with either. Mine are free with BOA.
Nothing is free with anyone. Last time I checked, BOA was not a charity or a non-profit company. They just choose not to tell you how you are paying.
The 2% load fees are horrific and morally criminal. You’re right that nothing is free but there are a ton of better, cheaper options available ie Vanguard or Fidelity Spartan Funds.
I worked for Jones for 12 years. I thought they were amazing and I recruited 14 and trained 9 of them. I came to find out they are a truly evil company.
Why?
We’d love to know why you say this. I interviewed with them and RAN out the door when I heard what they do. You’re paying them a lot of money to do what anyone could do for way cheaper. Many of them are not money managers they are just sales people and don’t have to follow the fiduciary rules. Its like a CULT. My buddy’s wife that worked there called it “The FIRM” as in you had to drink their Koolaide.
You need to check again. Your best advice is free. I know I retired at 50. Let Edward Jones control some of my money only to find my dog did a better job.
Edward Jones is by far the worst brokerage company I’ve ever dealt with. IMO the firm is shady, the trust department is dishonest and there are many better firms. ANY FIRM is better than ED Jones. On a $400,000 trust we paid $15,500 in “administrative costs” n one year which works out to almost FOUR PERCENT. This is just the tip of the iceberg when it comes to bad stuff about Edward Jones.
If you want to watch an Edward Jones rep dance around a question ask them if they are a FIDUCIARY. Take the time and find someone who had your interest tied to their paycheck. A proper money manager will sound more expensive but companies like Edward Jones will never tell you the real cost of their free services. FYI with Edward Jones my cost was 7.95% he had us in two funds that lost 11 and 15% over 5 years, take out those funds and the cost was 3.68%.
The fees listed in this article are misleading and incorrect. Do your own research.