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.
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.
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.
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.
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.
This account comes with no minimum investment requirement. It allows access to numerous markets, including:
- Mutual funds
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.
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.
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.
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
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 Personal Capital's service over Edward Jones'. Not only can it manage your money, but Personal Capital has a free personal finance app that's top notch.
|Minimum to Open Account||$100,000||$0||$500|
|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.