Author Topic: Help! Upcoming meeting with Edward Jones advisor  (Read 1938 times)

GettingClose

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Help! Upcoming meeting with Edward Jones advisor
« on: January 08, 2018, 05:15:27 PM »
My husband is a medical professional with a PC which has a 401(k) with Edward Jones.  (This won't be changing - just take it as read.)   He hates anything to do with money, except spending it, so has asked me to take a meeting coming up next week with our EJ advisor.  The advisor called the meeting because two of my husband's older employees recently retired, resulting in a much lower average age.  The advisor wants to discuss changing the holdings to be more appropriate.

As a side note, we have no plans to withdraw the 401(k) money early for FIRE, since we have non-retirement assets to use first.
 However, we do plan to roll the 401(k) into an IRA in the next couple of years.

How can I look at a list of our holdings and figure out what the fees are, and if they're appropriate?  I attached a list. If I take the first one, AEMZX, I can go to https://finance.yahoo.com/quote/AEMZX?p=AEMZX and see that its return is over 37% for 2017, but if I go to https://finance.yahoo.com/quote/AEMZX/profile?p=AEMZX and look at the fees (also attached) I don't know how to make heads or tails of it, considering that the 401(k) holds about 400 shares.  Are there any sites where I can plug all the holdings in to be evaluated?

Beyond fees, are there other questions I should be asking?  Any help or guidance is sincerely appreciated.

L.A.S.

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Re: Help! Upcoming meeting with Edward Jones advisor
« Reply #1 on: January 08, 2018, 05:57:12 PM »
My gut tells me he's brining you guys in to fish an see if you have other assets he can manage besides what he's already handling in the 401(k).

I'd just avoid sitting down with the guy.

If he insists on knowing more, transact in writing.  Have him email you whatever forms he needs you to fill out, then fill it out and photocopy it and then mail it back to the office.

P.S. Edward jones isn't known for caring much about lowering fees.  I don't think there is much you can do about that.  Your questions will likely fall on deaf ears.

harvestbook

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Re: Help! Upcoming meeting with Edward Jones advisor
« Reply #2 on: January 08, 2018, 06:18:09 PM »
Honestly, it wasn't until I moved my Edward Jones funds into Vanguard that I could really see what was in them and all the fees (including the .25 percent 12b1 fee.) None of it made any kind of strategy sense, there was a ton of overlap, and no overarching method of even an identifiable AA. I don't know, I guess take your lumps and move as soon as you can. The EJ person is a salesman, not an adviser in any sense of the word, and has no fiduciary standard to follow.

They also get kickbacks on some of the funds, so that explains why many of them are used. Looks like Blackrock and JP Morgan are in that class. http://www.edwardjones.com/images/revenue-sharing-disclosure.pdf

I guess the only thing I'd ask is if there was any way to lower costs, which he/she will probably not be forthcoming about, since that's how they get paid. Good luck.
« Last Edit: January 08, 2018, 06:24:28 PM by harvestbook »

evaporator

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Re: Help! Upcoming meeting with Edward Jones advisor
« Reply #3 on: January 08, 2018, 06:54:21 PM »
I quite EJ and went to Vanguard, as I suspect a lot of folks at MMM did.
What I did was sit down and run every fund I owned at EJ through the funds website and wrote down all fees associated with that fund.
I then went to Morningstar and compared the funds I owned at EJ with basic index funds and realized that the EJ funds all had high fees, and mostly underperformed the index. Somewhere on Bogleheads there is a sticky about using the Morningstar website, not sure where it is. It will show and calculate the expense ratio of the fund, but not the front load- just know that, the front load can be 5.75% right off the top. That's one way to compare what you have with something else.
Not sure if that is what your looking for, but hope it helps.

Frankies Girl

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Re: Help! Upcoming meeting with Edward Jones advisor
« Reply #4 on: January 08, 2018, 07:11:38 PM »
EJ is the bottom-feeding slime that you should be scraping off your shoe as you run to the exit. If your husband is in charge of this office (it seems like he might be, but just doesn't care about switching?) then he needs to understand one thing: he is allowing scum to rob him and his employees legally. That is shitty. REALLY shitty.

If your husband does own the business and just doesn't want to be bothered... can't YOU change up to someplace like Vanguard? Just do the legwork, get the necessary paperwork, plop it in front of him and tell him to sign where he has to sign and then transfer all the accounts over and be happy. Unless the EJ is a family member or college buddy? In any case, you still could tell him "use me as an excuse if they call you about why you're leaving EJ - your mean ol' spouse is deadset on Vanguard so gotta keep the wife happy, sorry bud!" No one says you ever have to speak to that person again, and believe me, it isn't the first time an EJ adviser has been dumped and it won't be the last.


http://portfolio.morningstar.com/Rtport/Free/InstantXRayDEntry.aspx
^this is Morningstar's way to analyze your portfolio; might help a bit

And I also agree you should not meet with the EJ salesguy (oops, "adviser"). He/she just wants to screw you even harder now, so it's pointless. They are trained to counter any argument and throw up all sorts of convincing charts and numbers to justify their insane fee and load structure. They prey on the elderly, the too busy, the naive/scared, and the lonely, and will try to make you feel like they are your buddy, your good friend... because it's harder to tell a "friend" to stop screwing you than if it was strictly a business relationship.

Just figure out the lowest cost, broadest market fund they offer, insist on that one, and tell them to not freaking touch anything else - no buying/trading/rebalancing - NOTHING. Their services are not required, and as soon as possible get the hell away from them - which will mean paying them transfer fees, closing account fees, allowing you to breathe fees... it would be worth it to get away from them.

« Last Edit: January 08, 2018, 07:13:47 PM by Frankies Girl »
I frequently have no idea what I'm talking about. Like now.

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Car Jack

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Re: Help! Upcoming meeting with Edward Jones advisor
« Reply #5 on: January 08, 2018, 08:12:35 PM »
#1 answer: Don't meet.  Don't even cancel.  Block this thief's number and if he gets in contact, tell him you'll be filing a restraining order.

#2 answer:  If you can't do the above, every time you meet with him, hand him $10,000.  You'll be throwing that away anyways. 


nick_mmm

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Re: Help! Upcoming meeting with Edward Jones advisor
« Reply #6 on: January 08, 2018, 08:29:04 PM »
Agreed!

One of the biggest red flags with my "financial advisor" a.k.a. salesperson was years ago I was always told that index funds had higher risk than mutual funds, which I argued with him over.  Once my accounts switched to a flat 1% fee, all of a sudden ETFs/index funds were a good idea.

What really happened-- previously he was only paid on commission, therefor mutual funds were used. Now that I paid the same rate for all holdings, low-cost ETFs made sense because they keep the difference between the 1% and what the mutual fund fees are, so it is in there best interest to have low cost funds.

Certainly proves whose interest was in mind all along, and it was not mine.

Mighty-Dollar

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Re: Help! Upcoming meeting with Edward Jones advisor
« Reply #7 on: January 09, 2018, 12:09:08 AM »
meeting coming up next week with our EJ advisor.  The advisor
EJ are not "advisors". They are salesmen in search of transactions and they sell expensive products. That's why they're "free". That's the bait.
Stop working with salesmen and invest in index funds like VOO and BND. Simple.

teen persuasion

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Re: Help! Upcoming meeting with Edward Jones advisor
« Reply #8 on: January 09, 2018, 07:57:59 AM »
My husband is a medical professional with a PC which has a 401(k) with Edward Jones.  (This won't be changing - just take it as read.)   He hates anything to do with money, except spending it, so has asked me to take a meeting coming up next week with our EJ advisor.  The advisor called the meeting because two of my husband's older employees recently retired, resulting in a much lower average age.  The advisor wants to discuss changing the holdings to be more appropriate.

As a side note, we have no plans to withdraw the 401(k) money early for FIRE, since we have non-retirement assets to use first.
 However, we do plan to roll the 401(k) into an IRA in the next couple of years.

How can I look at a list of our holdings and figure out what the fees are, and if they're appropriate?  I attached a list. If I take the first one, AEMZX, I can go to https://finance.yahoo.com/quote/AEMZX?p=AEMZX and see that its return is over 37% for 2017, but if I go to https://finance.yahoo.com/quote/AEMZX/profile?p=AEMZX and look at the fees (also attached) I don't know how to make heads or tails of it, considering that the 401(k) holds about 400 shares.  Are there any sites where I can plug all the holdings in to be evaluated?

Beyond fees, are there other questions I should be asking?  Any help or guidance is sincerely appreciated.

Just trying to clarify: are you meeting regarding your personal investments, or the investment choices in the 401k offered to all employees? 

Why would the average age of employees affect what choices are offered?  It sounds to me more like the EJ guy has found a "plausible" reason to switch up your plan's holdings, which just so happens to create churning in everyone's account.  Remove some holdings - everyone sells those.  Add new options - everyone buys those.  More fee income for EJ guy, more lost to fees for employees.

trollwithamustache

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Re: Help! Upcoming meeting with Edward Jones advisor
« Reply #9 on: January 09, 2018, 08:14:05 AM »
Moving the business 401k is a bit more complicated and can make employees nervous, so I do understand the reluctance to do that.

As others have noted, this sounds like churn for fees. If this guy was actually earning his advisor fee, why is he using the average age of people in the plan to make investment choices for any individual? shouldn't he be using the individual's age to select an allocation between stocks and bonds?  Typically I assume advisors are sleazebags, but this one may be a moron.

GettingClose

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Re: Help! Upcoming meeting with Edward Jones advisor
« Reply #10 on: January 09, 2018, 10:09:00 AM »
Thank you all for the advice/thoughts/comments. 

To trollwithamustache and teen persuasion, it's the type of 401(k) where all the assets are in a single pool - not the type where each employee can make his/her own choices.  Therefore it does make sense that if the average age goes from 58 to 38 that the common pool be more heavily weighted towards stocks, rather than bonds.  I'm meeting with the advisor to discuss this common pool.

To Mighty-Dollar and Frankies Girl, we are so close to FIRE that it doesn't make sense to move the 401(k) with all the associated costs.  We'll roll our portion into an IRA as soon as the PC is closed. 

To Frankies Girl, I will use the Morningstar site to see what it might uncover.

hadabeardonce

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Re: Help! Upcoming meeting with Edward Jones advisor
« Reply #11 on: January 09, 2018, 11:43:14 AM »
I was with Edward Jones in 2015 and switched to Vanguard funds in early 2016.

2015: -9.91% ROI
2016: 20.95% ROI
2017: 30.20% ROI

Beginning Acct Balance - Ending Acct Balance = Gain
Gain - Contribution = Profit
Profit / Contribution = ROI


Front loads and expenses will kill your returns. EJ is taking your money, you are paying them to do it and assuming all of the risk.

If for some reason your are trapped with EJ, ask if you can manage your own investments (regardless of their risk assessment survey), ignore their portfolio recommendations and funds they suggest. Say you only want no-load funds with fees lower than 1%, .5%, .25%, etc.
Standard advice: Read "Your Money or Your Life" and "A Random Walk Down Wall Street"
https://forum.mrmoneymustache.com/journals/had-a-beard-once's-mustachianismishticness-journey/

Spartans

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Re: Help! Upcoming meeting with Edward Jones advisor
« Reply #12 on: January 09, 2018, 01:27:42 PM »
Run, don't walk, away from EJ.  They have one goal, to separate you from your money.
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BuildingmyFIRE

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Re: Help! Upcoming meeting with Edward Jones advisor
« Reply #13 on: January 10, 2018, 09:33:36 AM »
Thank you all for the advice/thoughts/comments. 

To trollwithamustache and teen persuasion, it's the type of 401(k) where all the assets are in a single pool - not the type where each employee can make his/her own choices.  Therefore it does make sense that if the average age goes from 58 to 38 that the common pool be more heavily weighted towards stocks, rather than bonds.  I'm meeting with the advisor to discuss this common pool.

To Mighty-Dollar and Frankies Girl, we are so close to FIRE that it doesn't make sense to move the 401(k) with all the associated costs.  We'll roll our portion into an IRA as soon as the PC is closed. 

To Frankies Girl, I will use the Morningstar site to see what it might uncover.

Are you sure it would be more expensive?  Have you had a phone call with Vanguard or FIDO to find out?  I ask because it seems like you're having a hard time to get a handle on the fees you're being charged. 

You would be AMAZED at how much my  portfolio started to grow when I broke up with Merrill Lynch and stopped paying the 2% fee.  They were also churning my IRA portfolio to generate more fees. 

I would strongly recommend you read The Bogleheads Guide to Investing, and after that, A Random Walk Down Wall Street (get the newest version).  Once you start to understand how you are being hosed you'll put your running shoes on.  Good luck.

GettingClose

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Re: Help! Upcoming meeting with Edward Jones advisor
« Reply #14 on: January 10, 2018, 09:46:47 AM »
Quote
stopped paying the 2% fee

Goodness!  That is incredibly high.  I thought 1% was high ...

Spartans

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Re: Help! Upcoming meeting with Edward Jones advisor
« Reply #15 on: January 10, 2018, 10:39:52 AM »
Quote
stopped paying the 2% fee

Goodness!  That is incredibly high.  I thought 1% was high ...

1% is high.  lol
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BuildingmyFIRE

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Re: Help! Upcoming meeting with Edward Jones advisor
« Reply #16 on: January 17, 2018, 02:32:22 PM »
Quote
stopped paying the 2% fee

Goodness!  That is incredibly high.  I thought 1% was high ...

1% is high.  lol

Yep.  I have family still with ML and they are paying the same 2% fee.  It kills me but they feel they are being very well taken care of.  At least I'm out of there!