I have a financial planner from Edward Jones bugging me to open a full service financial planning and investment account with him. I historically have used discount brokers and reseached/purchased my own stocks, but wouldn't mind having someone else to the work, but for a small fee. His costs are 1-4% of the $ value of any transactions and with this I get a managed portfolio, free financial advice, etc. seems high to me, but no previous experience.Any info appreciated, thanksRobert
I have an account with Edward Jones, and also Merrill Lynch and a discount broker. Each has its niche. The value of the advice from a Edward Jones broker depends on the experience and ideas of the broker. Those are usually one-broker offices. I find them good for fixed income, very conservative type investments. They won't let you do options at ALL. So the answer to you question very much depends on the individual who would be your broker. They vary from excellent to awful, so it isn't possible to make a generalization. Best wishes, Chris
His costs are 1-4% of the $ value of any transactions and with this I get a managed portfolio, free financial advice, etc. seems high to me, but no previous experience.Are you sure the percentage is against the cost of transactions? Frequently, the fee for this type of account is a percentage of the total value of the account and is accessed annually.In either case, whether this is a good value will depend on how good the advice is, how often transactions are made, and of cource your ability and desire to do it yourself through a discount broker.
Lessee--the last trade I made in my Edward Jones account was a purchase of about $10000 of Exxon. It is now worth about $8000, and I paid about $120 commission, including handling charge. (Nothing was handled, the stock is in street name in the account. They only sent me a confirmation). Am I angry? No. My broker was quite convincing that this would, long term be a good buy. I suppose it will be. I don't plan on selling any time soon. But I don't make a trade in that account very often, and when I do, most of them are buying bonds, where I figure the cost is about 1% of the amount invested. So if you make four trades a year and hold onto the position for 4 years you would be paying 1% of assets annually. Not up to Fool standards, but if you are getting good advice, OK. Best wishes, Chris
Robert- Check out the Fool on the Hill article: "A Different Kind of Broker" by Whitney Tilson that appeared on 12/11/01. It has a good discussion of Edward Jones.
I am a Jones broker, and I can assure you that the small amount of comission paid on any individual transaction is well worth the personal attention and guidance your Jones broker has to offer.Historically our investors have fared well due to our investment philosophy, which, by the way, Motley Fool recently touted on their site.Naturally, each broker has their own philosophies, but by and large, you can feel confident that any EDJ representative will be doing what we are trained to do, and that is what is best for you, the client.Hope this helps.
One must understand the fundamental differences between full-service brokers (or money managers) and going the discount route.When to use a broker such as Edward Jones?a) if you portofolio is 500k or above, and managing it directly has become almost dauntingb) you are not financially saavy, and need advice as to what to do with your money.c) you want personalized attention and serviced) you are indifferent towards high fees and annual account chargesJones will charge a 2% reinvestment fee on dividend income. This can amount to tens of thousands of dollars in fees over 30 years or so -perhaps more. They also charge full-service commission rates on stock purchases (which is normal). There will be a $35 IRA fee, a annual account fee (depending), etc. The funds they recommend will be "loaded", often at 5%+ off the top -eating into returns. There could be 12b1 fees, which are essentially surchrges on fund sales. If you can stomach all this, and if the service warrants it, go for it.Understand that a Edward Jones advisor is a salesman, plain and simple. The goal is not to generate strong returns for the client, nor is it to protect the client's investments. The goal is to collect revenue from fees collected, and to "keep the client happy," which can mean personalized service. I dumped my Dain Rauscher broker after he sold my sister on a penny stock -which generates high fees for the broker. Also, unless your portfolio is large enough, the salesman could care a less about you -he just sees you as profitless paperwork.Now this in no way is a diatribe against brokers. They are in business to make money, just as a discount broker is. The service you get is reflected in the fees. The big mistake a lot of people make is going "the cheapest route" and they end up with lousy service and headaches. The issue I have with full-service brokers (and this is from experience) is that their "advice" is not only incorrect many times, it is downright dubious. Make your own decisions.Veronique
"and this is from experience"??? Obviously not with Edward Jones. The IRA fee I pay is only $30. Can I stomach the fees of front end loads? Yes, because I'm not jumping in and out. I plan to hold the funds that I have until retirement. I'm only 23 and I don't need the cash for another 30 years. The managment fees for 30 years worth of no-load funds is quite a bit more than the 5% up front in A shares. I certainly don't have a 500k portfolio. While I may not be the most financially savvy, I do understand long term investing requires patience and GOOD advice. Not the advice from some idiot (like myself) who posts ridiculous messages on a website. Don't listen to this guy, talk to somebody face to face before you decide where to put your money. It's yours, be smart with it.A satisfied Jones client.
My purpose is not to rip on Edward Jones, but merely to point out some shortcomings with full-service brokerage firms. I used a full service broker for a long time (Dain Rauscher) before finally getting fed-up and moving my money.Understand that neither you or me is an idiot. The stocks and funds your Edward Jones advisor will recommend are based largely on business partnerships between Jones and the firms offering the products. Jones "promotes" things such as Goldman Sachs and American funds, or annuities through insurance companies. You are not getting "objective" advice.Loads on mutual funds will cost you a lot of money. It has nothing to do with "jumping in and out" -because I don't do that either. There is not a fund Jones promotes that can compete with Dodge & Cox, Clipper, Dreyfus, or other no-load families. 12b1 fees and dividend reinvestment fees will also eat into your returns. It can cost you tens of thousands of dollars over the long-term. I currently use Fidelity, and so far am happy. I make my own investing decisions, after getting lousy "advice" (sales pitches) from full-service brokers.
Do you work for a discount broker? Because that sounds like advice, or should I say sales pitch, from a discount broker? Hmmmm...
No, I don't work for a discount broker. Tell me though, what does Edward Jones give you specifically, that discount brokers do not?
Well, one, a face to look at rather than a computer screen. "Real Time" feedback, not an email the next day from someone who doesn't know me personally. Again, I'm holding my funds for the long haul. The 5.75% up front and the .25% "trailer" over 30 years is far less than a no-load with nothing up front, and 1% annually. Maybe I'm an old man in a 23 year olds body, but I like to see people, and talk to them, rather than type my questions, and wait for responses. It's a shame that you had such a horrible experience with some guy who called himself a full service broker. If he were "full service" you wouldn't have such a beef with others. While you may be "savvy enough" to create great returns on your own, I'm quite happy paying to get the returns I want at retirement. I'll take an American fund over Van guard any day. But then again, I'm not "savvy."A Still dedicated Jones client
I certainly can understand wanting to meet with your broker face-to-face. How much cash do you have at Edward Jones? I find that this is the overriding factor as fas as customer service goes. My other question is -do you have annuities through EJ?
Read this ed jones article: http://www.fool.com/news/foth/2001/foth011211.htm
The managment fees for 30 years worth of no-load funds is quite a bit more than the 5% up front in A shares.You are sadly mistaken if you think that there are no management fees on the load funds. They are there to compensate the management. Loads are just a fancy word for the commission that goes to you broker for selling you this fund. You are paying them on top of management fees.Vlad
Well, I have had an account with Edward Jones for several years. My broker is a personal friend, whom I met before she got into that business. Her integrity is unquestionable, so I figure if she makes a mistake, or advices me poorly, it will be an honest error. I came into an amount of money I'd never dealt with before about 7 years ago and, being completely uneducated in investing, I handed it to her and said "keep it safe and make it grow." Overall, she and I have done pretty well, Lucent and my own occasional rash purchases notwithstanding. I like their model portfolio and I especially like their "Fallen Angels" list -- companies in their model portfolio that are, in their opinion, currently selling at attractive prices. These are all large caps, I believe, and they have a mix of industries and growth/income/aggressive growth that they recommend. I took some hits this last year, along with the rest of the market, but I think if I'd taken her advice and been better diversified, I'd have been in better shape. (I tend to like technology/aggressive growth stocks because I know more about that industry . . .)But now I'm wondering if it would be Foolish to open up a discount brokerage account, and buy Fallen Angels (getting the research from old Ed Jones, since I'd still have an account there) for lower commissions. My IRA would stay with Jones, and I might do this with just a small amount at first -- say $5K. This might be considered tacky, too, in certain circles. Anybody have experience in this?
I used a full-service broker for over 10 years, until I realized that the fees, when calculated over a length of time, came out to a whole lot of money. When times were good, I hardly batted an eye. But times are hard now, and every dollar counts. My goal this year is to at least break even, or gain between 1-5% on my investments (I believe we are in a long-term secular bear market). I won't do that if I'm getting charged a high rate for everything I do.Edward Jones is a good place to keep a IRA -you don't do too much with the IRA, and a reputable firm can serve as a caretaker. But for a standard brokerage account, a discount firm is a much better idea.
My Edward Jones man couldn't tell me what fees are on my IRA or provide me with a commission price list, and said I would be a fool to buy an index fund. Does anyone know how much it will cost me to transfer out of Edward Jones?
I would ask the broker himself. If not, ask another Edward Jones broker near you. There's also a form for email questions at http://www.edwardjones.com/cgi/getHTML.cgi?page=/USA/email/webmaster_usa.html .Good luck.David.
Jones charges between $35-40 annually for IRA maintenance, which is pretty standard. Commissions generally run around 1-2% for stock transactions, but that depends upon the type of order (mraket order, limit order, etc.) No issue there. Here are the issues I DO have with Jones.2% dividend reinvestment fee -highway robberyonly sell/recommend "loaded" mutual funds -those eat into you returns.There is no evidence loaded funds do better than no-load.I am currently using a discount broker after transferring from Dain Rauscher. I have been very happy with my decision (I am with Fidelity). It is very easy to transfer you securities, funds, from one brokerage to another.
Based on Whitney Tilson's December 11, 2001 article (http://www.fool.com/news/foth/2001/foth011211.htm), you may be wise to look for a different Ed Jones broker. Also, if you think your current broker may not be following the company's guidance, you may want to report him to the company. Not all brokers are above board. I have a very good Ed Jones broker in San Antonio. Before he recommends anything, he listens to me, then advise me on what to do, what fees are involved (including how much of that is for him), upfront and long term, and whether there are tax advantages. He may be a cut above the rest, but he's can't be the only broker who operates this way.
The fee for a Jones IRA (self-directed) is $30.00. You can hold most types of investment securities in the IRA. However, if you only are going to hold mutual funds in the IRA, have the IRA held by the fund itself and it will cost you $10.00 or less. Also, the broker should explain to you about the A,B,C class shares on the fund. You can buy the B and C shares with no front load... but, the B shares have a decreasing defered sales charge if you redeem them before 6 years and the annual operating expenses are sometimes close to double the A shares. However, the B shares convert to A shares at year 8 and drop down to the lower annual op cost. C shares have no front load.. never convert to A shares and will always have the higher annual operating expense. Does that all make sense? Hope so.
It's my understanding that Jones only offers loaded funds. You may be able to purchase no-loads through them, but they won't recommend it. This is true of most full-service brokers. A mutual fund with a load is not a suitable retirement investment. For example; in the case of A shares, a sales charge of 5.75% is charged every time you purchase shares in the fund. Dividend redistributions may or may not be charged this fee. This means that you are losing 5.75% off the top, every month you invest. There may also be 12b1 fees associated with these loaded funds, putting the annual expenses even higher. You will have to get a 11% return or better every year to stay above the fees and inflation. Verdict?Loaded funds are loser investements.If Jones will let you purchase no-loads, but they may hit you with some unusual charges. Loaded funds make brokers rich, not you.Open a IRA in a discount brokerage with a good name, such as Fidelity or Merill. Invest in no-load mutual funds.
HahahahahaMerrill is not a discount firm. Furthermore, Merrill has a reputation of being one of the most pretentious firms in the business...in fact, 98% of the people here would not even qualify to do business with a Merrill broker...they are politely "firing" nearly all of their accounts with less than $150k in assets. FYI
While the differences in share classes may seem stupid...there are actual reasons for them.A shares are generally meant for your longer term holdings (usually 10 years plus) The lower annual expenses offset the intial upfront charge (over time)B shares are generally meant for your more intermediate term (say, 5-10 years)...<usually> after 5 years, your CDSC is dropped, and the class converts to A, hence your annual expenses drop.C Shares are best for shorter term holdings (i.e. sector funds, money market funds, etc)...usually come with a 1 year CDSC (about 1% average), but pay nothing upfront or to sell...typically pay about 1% annual trail in addition to annual expenses....your generally better holding C shares if you plan to hold your fund between one and five years.Of course, no loads or load waived funds are an option as well. But many of those are proprietary, and come with large overlap. No load or load waived index funds are no brainers.
Ed Jones will tell you (they told me this today) that a loaded fund charging 5.75% up front, with .55% annual management fees is a better deal over 10 years than a no-load fund charging 1.5% annual management fees.Loaded fund: 5.75% + 10 x 0.55% = 11.25%vsNo-Load fund: 10 x 1.5% = 15%I think this depends on the performance of the fund, but if you assume that performance is the same, where is the fault in this logic? I was and still am skeptical, but my tiny brain can't find a strong rebuttal...Hep me, hep me!
Ed Jones will tell you (they told me this today) that a loaded fund charging 5.75% up front, with .55% annual management fees is a better deal over 10 years than a no-load fund charging 1.5% annual management fees.Running a comparison using a flat 8% annual return with all fees taken out on the last day of the year, the load fund in this scenario would give you $695.10 more at the end of 10 years on a $10,000 initial investment. The crossover comes at the end of year 7. Prior to that the no load with the higher expenses gets you more.
As far as I can see, NAV performance is overwhelmingly the most important factor in fund performance. The fact that you're stuck with their stable of load funds means that you might have to settle for a fund with worse performance; the better fund you want might not be one of the options. And suppose the just-as-good no-load fund which you can't buy is a bond fund or an index fund with 0.3% fees? And suppose the load fund has 12-b1 fees, and the just-as-good no-load fund doesn't? 12-b1 fees can be murderous over the long term. I haven't checked nedludd's numbers, but assuming he's right and that you are a long-term investor, take into account that you might change your mind before seven years about being in that particular fund for the long term. What if the fund changes management, or economic conditions change, and the good load fund becomes a lemon before the crossover point?What really bothers me about Edward Jones' partisan 'logic' is that they don't take the loss of profit from the front load, which is lost from the beginning, into account. Suppose that you invest $10,000. The load is $575. (As Ben Graham points out in his book The Intelligent Investor, this is not called 5.75% in any other field of endeavor, and is not quite honest. In any other industry, if you pay $10,000 for a product, of which $575 goes for fees and you get $9425 of product, this is called paying 6.1% fees. As we say in Aramaic, people normally calculate fees "from the outside", starting with the value of the product, and they are calculating "from the inside", starting with the final price paid.) You have to consider the loss of profit on the $575 over ten years, or however you want to do your calculation. Arbitrarily using the compound interest calculator at http://www.smartmoney.com/compoundcalc/ with a 5% return on that $575 over 10 years, Edward Jones' innocent proposal costs another $937 in lost profits you could be making. That's a lot to ignore on a $10,000 investment.Good luck,David.
They probably used a tool that is offered by The American Funds which you can put in the initial deposit, systematic investment amount, and then it will figure out what the costs for each class will be for the length of time you specify. It will even take into consideration that the B shares are reclassified to A shares and the annual operation expense decreases. The difference over 20 years is actually very minor..I ran it with about 3k initial, 200 a month for 20 years and it was like 40.00 difference. I know because I WAS a Jones broker until I figured out that its all about the sale, not doing the right thing.Some will argue that with a no-load you'll have more working up front for you.... I'm pretty analytical and I really can't see much difference depending on how much you're putting in. If your initial deposit is 10k versus 100.00 then, yeah, there is a big diff...Just my opinion though... I do like the no-loads like Vangaurd though! I'll never be a full-service broker or go to one again!!! Take control of your own stuff if you feel comfortable doing it. I know first hand that many of the brokers at these full-service brokerages didn't know a stock from live-stock before they got the job. Some have never even had a job or a mortgage and because they passed the 7 & 63 they are all of a sudden financial planning experts. So, you can't do any worse than they can!
Thank you. I've also not seen enough of a difference to distinguish between whether front-load or no-load is the way to go. Front load seems to come out on top by a small amount.The real issue is do you want control over each investment or do you want to put money away and let someone else handle it? And do you trust your Ed Jones Rep? Just because someone works for an investment company does not make them a financial genius.I was an Ed Jones customer, but my representative retired and passed my account to someone who didn't really listen very well. Also the funds I wanted to explore were not on the list of Fund Families that Jones was trying to push. So I had to move on to an account where I could take more control of my investments. But I also know several satisfied Jones customers with good service representatives. My advice, if you like and respect the rep, try and find out how long he or she will be a full-service rep and then decide.EP
How about the answer to one of the original questions? How much would it cost to transfer out of an Edward Jones account. I have 50K in muts there which I would probably leave alone, but have another 150K in individual stocks that I would like to transfer to a discount like Sharebuilder. I know I could just ask my broker but sometimes I like to keep my cards to myself you know.
Just curious why I'm not seeing any updates to this thread?The reason I'm very curious about thoughts on Edward Jones is that I went with Edward Jones on a rollover of my company 401 in March 2011.$100000 rolled over with the 5.75% commission. Now in Sept 2011, the $100000 is worth $88000.Also gave him a $11000 non ira investment in April which is now worth $9500 after fees and commissions.What am I missing here about the return on the Edward Jones offerings?I tried to do some math on the returns of my company 401 using the investments I had and it seems to me that those returns are 7.7% in the plus vs. the Edward Jones huge losses?Can anyone help me with the math or what I'm missing here? It just doesn't seem worth it to have given my 401 to Jones so that they could charge almost $6000 in fees to lose another $6000.Thanks
First - Edward Jones and any other Brokerage Firms out there are not in the Investment Management business. They are in the customer service and asset gathering business.I worked for a large investment firm and could not possibly watch all the accounts that I managed. I built my portfolio from zero to $50 Million. Just to put it into perspective that was over 3000 accounts, which were comprised of many different things from mutual funds, cd's, stocks, bonds, etc.The advisor is paid on commissions of new money or money movement. They do receive a small trail commission from the mutual funds, but not enough to feed your family on. So they are focused on gathering more assets.Second - The advisor cannot be held completely accountable for market fluctuation. September 2011 to now is not a long enough time to predict how the investmets you were recommended will perform. The commissions are set by the mutual fund company and I can tell you that the guy you invested with on got about 35% of the commissions, so you can see why he is always hungry for more money.Rules and Guidelines make it nearly impossible for an Advisor to move your money without falling under the microscope for many violations. The regulators look at every investment on a long term basis.So to answer your question: If you are truely a buy and hold investor, meaning you are not watching your account constantly, and are looking 5 years or more out, then Edward Jones or any other Brokerage Firm are good places to get great customer service. If you are not this type of investor: then the old saying, "If you want something done right, do it yourself" may be the best decision or maybe less risky investments may be an option.I hope this helps!
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |