The 0.59% annual expense ratio amounts to $23.60 out of that $4,000, but that amount will only grow as the account does, while the $40 flat fee will make up less of a percentage of my overall accountprovided my account actually does grow. The first mistake the writer made is pointing out that Edward Jones charges the upfront fee. Purchases of annuities in a Select Account may require at least a $10,000 minimum. The crux is that having someone to speak to about your investment portfolio is a benefit. It ranges from 0.5% to 1.35% the higher the asset value, the . your total cost would be 1.35 plus Fund Expense Ratio (They usually average about .6%) so 1.35 + .61 = 1.96% plus the 40 annual fee. 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. As for the conflict of interest, if your adviser and you dont see eye to eye, and you continue to stay with him or her, then its your own fault. The quiz questions are well designed, and multiple questions offer the option to enter additional text where appropriate. Edward Jones fees are extremely high if the advisor is just managing investments. Maybe. Over time, it bothers me for my investments not to be optimized with low-cost fees, but you are right that I just didnt know any better at the time. Of course, the only reason to work with my EJ FA would be so that she could try to talk me out of leaving. I did have a focal point at Fidelity who helped me bring things over. Ha! Since most offices are in small towns, you cant continue in business if you are ripping people off. Theres nothing wrong with the Wal-Marts of the world. Are you really diversified? You can call, you can email, you can book an appointment at the office. Compare cryptocurrency exchanges by fees, fiat currencies and deposit methods to find the right fit for your needs. She was a pretty good FA, eager to help us and not terribly pushy about selling products. $1-25K 5.75% So, I moved to a fourth. I have tried several. EDWARD JONES IS A GIANT RIP OFF Obviously, everyone needs are different, and getting screwed for one person may be a consensual relationship for another. 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. The expense ratio is slightly higher for VTSMX than VTSAX, but still very cheap relative to the competition. Plans provided by Edward Jones. Absolutely you get what you pay for! (see headline above), All Corporate wants their financial advisors to do is to bring in new business and meet the required sales and marketing call goals. He once called me in the hospital. It's much safer than many newer platforms that haven't been tested. Dont base your decision to invest with Edward Jones on the lack this article offers. And Edward Jones says that this annual fee does include internal investment expenses. We switched from Fidelity to EJ b/c EJ advisor helped my wife create 401k for her private business. He is horrible, calls me every day when he has something to sell. What needs to be looked at in truth is the return you are getting, going to get you to achieve your financial goals. Edward Jones compensation and fees. You could be better off using a robo advisor. The hitch, though, is knowing what you think you know . For the elderly, this is darn near predatory. 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. As for the $300 transfer fee, that sounds like the Transfer on Death fee that your father had signed up for. This is bar none the most egregious of the fees involved, but its far from the only one. Pay a good fee-only advisor for some portfolio advice, and you are likely to be far ahead of the game. Its been proven active mutual funds underperform their benchmarks over and over and over. Despite all of this Im considering leaving EJ because of the fee increase and reading all the comments here. Anyway, good article and glad you could move your investment over! My Fathers 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. Check out AOA and AOR. The cost to us is worth it and in this sense, they do a great job. Use a low cost managed account if you need assistant and financial planning advice. Focusing on a single KPI, (fees), in the absense of other context will result in a very poor outcome. Multiply that over decades and all the lost gains because the money (MY money) is going into my FA/EJs pocket and not mine. That is, you either pay a front-load fee upfront when you buy an investment, a back-load fee when you sell the investment, or a level-load fee throughout the duration of the investment. Still waiting for his return call with explanation. During the 2020 COVID-19 stock market crash..So many ppl I know got scared..cashed out..lost $$$$$. Additionally, Online Access and regular statements can help you stay as involved and informed as you'd like to be. However, managing money is only a small part of what a financial advisor does. Stifel is in negotiations to buy Edward Jones, and that will change everything. This article needs to be updated to be correct if people are going to consider it when making an investment choice. I do my own ETFs / Individual stock trades though my Schwab account. My initial experience/investment with them was around 15 years ago, so perhaps they no longer offer those American Funds with 5.75% load fees (or at least your advisor didnt pile you into them). Edward jones Advisory Fund is by far the worst investment I have Down almost 6% over the last year. In actually think the percentage payment to an advisor is more of a conflict of interest per say. Ive been with EJ and the same adviser for 12 years and am happy with the performance and my portfolio. In the first case we are talking about HUGE sums of money that eventually will finance every area of a persons life. How you choose to implement this guidance with your financial advisor is up to you you make the decisions on buys and sells. Break away brother.you are just throwing good money away with the fees. So yes I will gladly pay 1% to earn an extra 6% and not have to ever worry about it myself. You need to study your accounts better. Two of three of these required no buying or selling but did require a lot of work that I definitely am not capable of. Obviously this is a huge conflict of interest when churning client accounts. Try to learn some about investments and be responsible for your own finances. So overall I agree with Jim Jones. Comparing any full service brokerage to Vanguard on fees alone, Vanguards self service model will win all the time. stocks, mutual funds, bonds, life insurance, annuities, etc etc etc etc, you always pay the piperOver 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.. 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). First of all, I would hope and pray that my radiologist isnt 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. He then charged me $30,000 to put me into some new mutual funds, all without my knowledge. 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. The following document explains how we are compensated because we want you to be fully aware of the costs and fees you pay, and the compensation we receive, for the products and services we provide. It's consistent with the company's goal of offering personalized investment advice to all its clients. not just any fee they take the fee off the money I already have invested every single month. I would challenge the writer to challenge his own assertions. They have always been encouraged to follow that standard even when it wasnt the law. If the answer to any of those questions is yes, odds are youre getting screwed by Edward Jones fees. Fees are not the number one determinant of returns. STAY AWAY FROM THEM I could go on further, but I know this is already a long post. This is contradictory. You can go to a Wal-Mart financial advisor (Vanguard, E-Trade, etc.) B shares-No fee to get in, but if you take it out there is a graduated fee to get out of the fund family-high expense ratio There clients blue collar to middle white collar are nothing more than bag holders . I. Tom, paying 2% or more to an advisor really hammers long term returns. You dont want to know. I cant say I wasnt warned, just to stunned to react or comprehend. Kudos to you for sharing this. Even most people who owned even a quality portfolio of investments who didnt have a proactive reassuring partner in a good advisor began moving money into cash after the majority of the downturn was behind us. The reality is that these fees wont prevent us from retiringthe habit of saving money and the power of compound interest will overcome an unnecessary 1% fee. Its 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. I interviewed with them and RAN out the door when I heard what they do. 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. Let's examine the competition. 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. cons Edward Jones account holders may also be subject to SMA manager fees. No information provided on TopRatedFirms.com should be considered a 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. Haha you are right that not doing my homework was part of my problem! Your EJ advisor will help you with more than just portfolio management. Schedule of Fees for Custodial Individual Retirement Accounts (PDF). Its an impossibility. DO NOT put your hard earned money with Edward Jones or other similar investment firms that charge well over 1% annually. Trying to get Ed Jones to reveal his holdings (a great secret) to the Estate has still not happened. Say your car needs repair AND you know how to fix it. Investors with fewer assets feel the sting most keenly; $250,000 represents an impressive portfolio for many middle-income savers. The company has branches pretty much everywhere. But keeping my mutual fund in addition to the stock for diversification. When you first sign up for Edward Jones, you take a quiz to help match you with an advisor and determine your investing goals. A shares have a breakpoint structure. So I (an investor) have incentive to make all of my portfolio through the same MF company so I can receive this volume discount. Edward Jones's fees. 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 doesnt know how to even make trades. Access to fewer markets:Advisory accounts permit only mutual funds and ETFs. Yes to those who want to put all your eggs in one basket and hope they dont crack, please do! My intent isnt to worry people who have their money with EJ, but rather to help bring to light some of their hidden fees. Temporary declines cannot be avoided over any long term cycle. Transaction Fees: $0 for online stock, ETF, and option trades (+$0.65 per contract fee . 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. Simple explanation: If you pay Vanguard .10 for an index fund and the fund gets a 10% 1 yr return you net 9.90%. I went with E.J. Cheap is not always better as index funds are market- weighted and more susceptible to bubbles. that dwindled to $55,000. Thats loyalty for you. But I know people who panic sold during covid crash at older ages that had control of their stuff directly. Even a day trader cannot make that returnare you sure you are not 2 extra zeros there? After college, I finally had an extremely modest income coming in. The studies also show how financial advisors lag index funds (and essentially make the same mistakes). Plus good Fiduciary advisors dont have 1000 accounts like Jones clones do. This indicates TLS technology is used. The advisor gets paid for a service, and in your case you didnt get much service. I am happy to set it on autopilot with a low-cost index fund, as you mention. This is just the tip of the iceberg when it comes to bad stuff about Edward Jones. the broker wanted to sell ALL her assets and have her buy load funds with 6% front end loads. You may think meh, 1% isn't that big of a deal, I think I'll stick with Edward Jones. The problems came after my dad died and I lost my family EJ advisor. Im sure there are plenty of who do. my father died in 1996. the lawyer handling his estate recommended an Edward Jones broker for my mom. The management fee (also referred to as the "program fee") begins at 1.35% for an investment of $250,000. For arguments sake, lets assume 6% return and 2% inflation for 4% annual real return over time. Under "Account Services", select "Spend Analysis". Wow thank you for the detailed response. The market is down 7% this year so far and you are mentioning getting out. And thats without even contributing another dime to that account. The commission varies depending on the type of asset that you buy. If you want/believe in the face to face value of having an advisor to talk to then pay the higher fees. EJ agents are just insurance salesmen looking to line their own pockets. First $250,000 1.35%. Note that the costs you pay in a Guided Solutions accounts are fee-based, not fee-only. The lo-cost investing environment in America today, is ONLY Vanguard, Schwab and Fidelity. Transferred out after 3 months and minimal fees. Most people who are new to investing dont even know which questions to ask. about the services, fees and agreements that are part of your relationship with us. The integrity factor cannot be easily discerned. The management fee (also referred to as the "program fee") begins at 1.35% for an investment of $250,000. How do you like that? Pay a visit to PaulMerriman.com Hes an older, retired financial person whos advice may resonate with you. I am a 20+ year Edward Jones advisor. Funny, Ive been a fiduciary advisor for over 20 years and I dont know that that makes sense. Lower Exp ratio and lowest cost of ownership over time compared to B and C shares. Read about its products, services, fees and more with ConsumerAffairs. 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