Author Topic: Made a mistake! Edward Jones  (Read 19916 times)

mandies

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Made a mistake! Edward Jones
« on: November 11, 2013, 08:15:43 AM »
So, my family and I are finally at a place where we've got no debt except a 15 year 3.25% mortgage, and have finished saving our emergency fund. We wanted to investing our extra savings, but didn't know any better and JUST opened an account with Edward Jones (on the advice of my parents.)

So far, we've only put about $4,000 into a Roth IRA and $2,000 into a joint investment account with EJ, so not a lot.

We're looking at investing another $3,500 or more by the year's end (got a lot of freelance contracts, which is great.) We plan to open a Vanguard account with the next money we have to invest.

We are definitely not going to add any more to our EJ accounts. Considering we JUST paid the upfront fees on A shares, should we leave the accounts as is for awhile, at least to gain back the value, or run screaming, cut our losses, and transfer it to Vanguard ASAP?




KingCoin

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Re: Made a mistake! Edward Jones
« Reply #1 on: November 11, 2013, 08:47:03 AM »
Considering we JUST paid the upfront fees on A shares, should we leave the accounts as is for awhile, at least to gain back the value, or run screaming, cut our losses, and transfer it to Vanguard ASAP?

I'd just consolidate at Vanguard. The upfront fees are a sunk cost.  The one consideration is taxes. Can the fees be netted against investment gains? Can they be carried over as short term investment losses for future years?
« Last Edit: November 11, 2013, 08:59:48 AM by KingCoin »

mandies

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Re: Made a mistake! Edward Jones
« Reply #2 on: November 11, 2013, 08:54:48 AM »
That's a good thought about investment loss. I don't really know the answer.

I looked into it more, and they charge a hefty $95 transfer fee per account too unless it goes to an EJ-managed account. Plus, if I don't get the account balance over $2,500, they start charging $3 per month. Quite the cautionary tale.

Frankies Girl

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Re: Made a mistake! Edward Jones
« Reply #3 on: November 11, 2013, 09:49:23 AM »
I would check in with Vanguard to see if they know of any easy way to transfer the accounts, but yeah, the fees are probably going to be a slightly pricy life lesson.

I wouldn't beat yourself up over it tho. I know I've been there... opened a money market early last year and got talked into front loaded funds. Sigh. I just killed the account this past week and fortunately got all of my money back with a (tiny) profit that made me feel a little better.

Bank

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Re: Made a mistake! Edward Jones
« Reply #4 on: November 11, 2013, 12:19:42 PM »
Kill it.  The expense ratios on those EJ funds are going to be higher than the Vanguard funds because EJ pays trailing fees to your broker.  So the longer you leave it there the further you'll fall behind.

CB

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Re: Made a mistake! Edward Jones
« Reply #5 on: November 11, 2013, 09:14:16 PM »
I wouldn't beat yourself up over it tho. I know I've been there...

Same here, but actually even worse than OP's misstep as our initial mistake was literally compounded over a long period of time. 

We opened a Fidelity Advisor account via a financial adviser friend of my parents (is that a theme?).  This was around the year 1999.  For about 12 years we took his advice about which funds to be in and when.  Didn't really think about it much.  We got front-load fees waived because we invested pretty much our entire life savings (which at that point wasn't a ton but we were moving back to the U.S. after a few years abroad and had saved up quite a bit in cash plus both wife and I had severance money from jobs we left).  Long story short, we were in Fidelity Advisor funds that averaged 1.6% in expenses!  For 12 years!  I'm still quite angry about the whole thing--20% of our portfolio potential lost to expenses!





Stache In Training

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Re: Made a mistake! Edward Jones
« Reply #6 on: November 11, 2013, 09:21:05 PM »
I had a similar experience, but didn't figure it out quite as quickly as you did.  Congrats on figuring it out quickly.  So I just bit the bullet, and simply chalked it up to experience.  Just think of it as an expensive lesson.  But yes, get out sooner rather than later.

mandies

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Re: Made a mistake! Edward Jones
« Reply #7 on: December 11, 2013, 09:57:44 AM »
Thanks all for the advice.

Got a kick out of EJ's rep when I closed the account: "Oh, if you had been interested in lower fees, you should have told me! I could have steered you in a different direction!" -- we're a family of four living a salary of less than $55k a year, and he knew that, and he still steered us towards high load-fee and high expense ratio funds.

So glad you all were here to help.

Cooperd0g

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Re: Made a mistake! Edward Jones
« Reply #8 on: December 11, 2013, 12:49:03 PM »
As far as mistakes go, that wasn't too bad and at least you now know and can steer other people toward Vanguard.

Khan

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Re: Made a mistake! Edward Jones
« Reply #9 on: December 12, 2013, 05:26:54 PM »
Got a kick out of EJ's rep when I closed the account: "Oh, if you had been interested in lower fees, you should have told me! I could have steered you in a different direction!" -- we're a family of four living a salary of less than $55k a year, and he knew that, and he still steered us towards high load-fee and high expense ratio funds.

Everything wrong with the financial industry summed up in one sentence.

"Oh, if you had known that we were ****ing you, you should have told us and we'd have reduced the size of the insertion."

_JT

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Re: Made a mistake! Edward Jones
« Reply #10 on: December 12, 2013, 08:36:52 PM »
I have some money with EJ -- is there an easy way to see the expense ratios and fees and compare them to Vanguards?

mandies

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Re: Made a mistake! Edward Jones
« Reply #11 on: December 13, 2013, 07:45:39 AM »
I have some money with EJ -- is there an easy way to see the expense ratios and fees and compare them to Vanguards?
Yes. I looked up the funds that they had me invested in on my online account, and I dug through the prospectus to find the expense ratio. Easier to do, though, I just Googled one of the funds I was invested in, Washington Mutual (I searched "Washington Mutual expense ratio") and found this,
https://www.americanfunds.com/funds/details/wmif/a.html

The website said the expense ratio 0.62% -- the comparable Vanguard Index Fund I'm in is 0.17%, until I upgrade to Admiral Shares at $10,000, and it will go down to ) 0.05%. Big difference!

The Washington Mutual A Shares I was talked into buying had a 5.75% "load fee" -- meaning I lost that right up front when I bought shares in the fund. Vanguard hasn't ever charged those for me.

You can also look at all their fees here. The one that really bothered me was the 2% reinvestment fee -- you lose 2% every time they reinvest your dividends. I don't think Vanguard charges this either -- they just make money on the expense ratio.
https://www.edwardjones.com/en_US/disclosures/account_fees/index.html

I'd get your money out as soon as possible, just like the folks above advised me to.
« Last Edit: December 13, 2013, 08:52:29 AM by mandies »

wtjbatman

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Re: Made a mistake! Edward Jones
« Reply #12 on: December 13, 2013, 10:53:47 AM »
Got a kick out of EJ's rep when I closed the account: "Oh, if you had been interested in lower fees, you should have told me! I could have steered you in a different direction!" -- we're a family of four living a salary of less than $55k a year, and he knew that, and he still steered us towards high load-fee and high expense ratio funds.

Everything wrong with the financial industry summed up in one sentence.

"Oh, if you had known that we were ****ing you, you should have told us and we'd have reduced the size of the insertion."

Not just financial industry, I love what customer service people will tell you once they realize they might lose you as a customer. Quick semi-related story. A few years ago when my cable bill jumped from the $60 "special introductory sign-up rate" to $120, I called up the cable company and told them I would like to cancel since I could get cable through another provider for less money. The customer service rep then acts like he just discovered something, and tells me "I actually see on your account that you are eligible for our lower introductory rate for the next 12 months." Oh really? You just discovered that? I took the lower rate and stayed with them. It pays to give these companies a call and see what they can do.

WillPen

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Re: Made a mistake! Edward Jones
« Reply #13 on: December 13, 2013, 10:59:54 AM »
You're not alone -- Prior to obtaining "financial awareness" I put my old 401k into a New York Life variable annuity IRA with one of my best friends. I just recently rolled it over into a traditional IRA with Vanguard.

I think I had to forfeit a few grand in the transaction. Now instead of having my account in dozens and dozens of probably very expensive specialized funds that automatically re-allocate every month, I have my money in 3 simple (and cheap!) index funds.

aj_yooper

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Re: Made a mistake! Edward Jones
« Reply #14 on: December 14, 2013, 07:49:04 AM »
An additional thought.  When you want to migrate money to a new provider (Vanguard, of course!), have the new provider request the money from the High Adviser Profit Firm.  They know what to do and it saves you more marketing and such.